Report: Commissioning cuts will create content shortage
May 3, 2023
A report from Ampere Analysis shows that the rate of TV commissioning in the US dropped significantly in H2 2022, and continues to remain low in 2023. This downturn is most profound for Scripted content, with Scripted TV commissions in the last three quarters down by 24 per cent year-on-year – with overall volumes even lower than during the pandemic.
However, Ampere believes that the resulting content deficit has created opportunities for those in a position to invest.
Audiences will feel effects of a content deficit later this year
To-date, the time lag between commission and release times means that although commissions have been lower, audiences have yet to see the full effect on TV schedules. But low commissioning now will create a future content deficit, with the slowdown likely to start to bite in Q3 2023 and beyond. Ampere outlines two possible scenarios. In the first, if commissioning rates recover soon, audiences will see between 5 per cent and 7 per cent fewer Scripted releases each quarter between now and Q2 2024, when the effects will ease. In the second scenario, if commissioning continues at current levels, audiences will start to feel a much greater impact towards the end of this year, with 16 per cent fewer releases expected in Q4 2023, and 20 per cent fewer from Q2 2024 onwards. Amazon is the exception to the trend
Fred Black, Research Manager at Ampere Analysis explains: “Scripted commissions at flagship SVoD services are definitely feeling the impact of budget cuts – and the studios aren’t only cutting back at their streaming platforms, with pay-TV networks like TBS, FX, OWN, Freeform, Nickelodeon, Comedy Central, BET and AMC all reducing Scripted commissions by over 50 per cent when comparing the past nine months with the previous period. There’s one big exception however – Amazon – which is capitalising on cutbacks made by rivals by increasing commissions of Comedy and Sci-Fi and Fantasy shows. Investing in Scripted commissions now can pay off doubly for those willing to gamble, as the extra commissions will hit the market just as the output of Original content from rivals drops to its lowest levels early next year.”
In Unscripted, AVoD grows as SVoD commissions fall
Although the decline of Unscripted commissions was severe across SVoD and pay TV, SVoD services have been the biggest loser, with commissions down 33 per cent over the last nine months versus the same period in the previous year, with 151 fewer titles commissioned. On the other hand, AVoD and FAST commissioners have provided a bright spot in the gloom with 83 Unscripted commissions over the period, 6 per cent of all Unscripted activity in the US in that time. Unscripted decline primarily at WBD, with Discovery+ on the chopping block
Warner Bros Discovery’s (WBD) merger has created an Unscripted behemoth – but one that the company is looking to slim down. The drop in unscripted commissions overall can be largely attributed to WBD. Between July 2022 and March 23, there were 241 fewer Unscripted TV commissions in the US: WBD Unscripted commissions accounted for 172 of them, a 32 per cent drop for the company’s Unscripted commissions overall, with cuts occurring at both its pay-TV and particularly SVoD platforms. The drop across the market outside WBD is only 6 per cent. Unscripted content was trimmed at Paramount and Comcast too by 16 per cent and 13 per cent respectively, while at Disney Unscripted output actually increased, primarily via Hulu. Black added: “While the commissioning cutbacks in Unscripted content at the dominant pay-TV and SVoD platforms have been severe, there is a sense of balance being restored after a significant pandemic peak. Covid-19 saw Unscripted commissions soar out of necessity due to production complications, and then continue at a high level due to a surprisingly enthusiastic audience. What we’re seeing now is a course correction. Unscripted commissions in the US were down 16 per cent over the last three quarters compared to the previous year, but compare it to the same period in 2019 and early 2020, and the drop is only 1 per cent. There’s also optimism in the growing number of commissions from AVoD and FAST platforms, showing that while some SVoD services may have over-leveraged on Unscripted content, there are plenty of nascent players still investing.”