The boom in television programming that has driven streaming in recent years in particular, will deflate over the coming months in a context of cost reductions. That is what Ampere Analysis estimates, which calculates that over the course of 2023, investment in content will barely increase by 2% compared to 6% last year. Difficult macroeconomic circumstances explain this adjustment, with companies such as Disney, Warner Bros Discovery and Netflix focusing their efforts on profitability rather than customer base growth.
These and other companies in the sector will adapt to the new reality in different ways. One of them will be the increase of cheaper productions to provide inventory to their streaming services, especially based on reality TV and other unscripted formats, something that Ampere Analysis indicates is already happening. And on the other hand, the viability of more expensive content will be audited more closely, taking into account hitherto less exploited viewing windows.
That may be the case of Netflix and movie screens, where it has briefly released Glass Onion: A Knives Out Mystery. That film is already one of the most successful in internal metrics in the history of the platform, which has traditionally dodged theaters and is currently the only one in the black in the entire streaming segment. Rivals such as Disney+ or HBO Max expect to reach that status in 2024.
This complex scenario partly explains the corporate moves that have been taking place in recent times at the latter two. Disney recently dismissed Bob Chapek as CEO after a quarter of soaring losses associated with streaming and brought back Bob Iger, who will prioritize profitability over user acquisition. And Warner Bros. Discovery is facing a series of severe adjustments such as layoffs and the withdrawal of HBO Max content to relieve debt.
In any case, both will lead in content investment this year, according to Ampere Analysis estimates, with $10.5 billion and $9.5 billion, respectively. Netflix only appears in fifth position in this ranking, behind Paramount and Comcast. Behind them, with more moderate investments, are Apple and Amazon.