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Report: Disney, Comcast – with mergers – dwarf Netflix in content spend
Monday, December 10, 2018

Think that Netflix is the top spender on original content or that we’re, perhaps, reaching a peak for content spending? Think again. A new study from Ampere Analysis posits that Disney/Fox will spend a staggering $22 billion in content while Comcast/Sky is set to come in with nearly $21 billion in original and acquired content spend by the end of 2018. The combined $43 billion represents about 20% of global spending on content, the researcher noted. Disney/Fox, meanwhile, will be responsible for 23% of all content spending in the U.S. market with Comcast/Sky claiming 14% of total spend in the U.S.

Netflix – which has been rumored to be on track to spend as much as $13 billion this year (and has acknowledged at least $8 billion) – is a somewhat distant third in the race to spend.

But it’s important to note that the Disney/Fox and Comcast/Sky content budgets are the product of merged content budgets, which actually puts Netflix in a little different light, in that it’s traveling solo.

And, although Ampere didn’t break sports spend out for either entity, there’s no question it makes up a significant piece of their pies, so we’re comparing apples to oranges a bit.

But it does underscore the trend toward content creation consolidation, the desire to create huge content empires that can share costs in an effort to keep expenses in check. And I don’t believe we’ll see any slowdown in M&E M&A through 2019. The bottom line is that if you are a content distributor, being in control of significant content creation gives you an edge.

The true coin of the realm is, after all, content. Without it, you can’t attract and keep subscribers… the crown jewels of the industry.

“Prior to the recent mergers, Netflix was on course to catch – and overtake – the top Hollywood studios by content spend,” said Ampere Analyst Daniel Gadher. “However, in light of the two new combined entities, Netflix would now need to triple spend to achieve this feat.”

Ampere pointed out that the size of the content libraries Comcast and Disney will control could help them hold off “the rising strength of online video,” at the moment, at least. That’s assuming either can really reach consumers directly to the extent Netflix and Amazon have, which isn’t guaranteed.

Disney, meanwhile, has announced it intends to no longer license content to Netflix, something that will potentially have a negative impact on Disney’s bottom line moving forward. CBS, for example, has found that having its own streaming service doesn’t preclude it from doing business with Netflix or Amazon, creating some pretty solid returns on content that otherwise might be less valuable.

Stay tuned.

Jim O’Neill is Principal Analyst at Ooyala. You can follow him on Twitter @JimONeillMedia and on LinkedIn

Jim O'Neill

An award-winning industry expert and futurist who specializes in the convergence of traditional TV and the Internet. My focus includes pay TV, Cloud TV, OTT, multiplatform media delivery, the ecosystem that surrounds it and consumer trends. A frequent speaker at CES, NAB, Digital Hollywood, Park’s Associates Connections events, Streaming Media and Digital Entertainment World, among others. I'm the Editor of Videomind, which in the past year has won awards from Editor & Publisher and Digiday. I'm also the Principal Analyst at Ooyala. I'm based in Michigan. I formerly was an analyst at Parks Associates and editor of FierceOnlineVideo and FierceIPTV. 

You can follow on Twitter @JimONeillMedia and on Linkedin