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Content spend driven by SVoD sees double digit growth in 2021

Apple TV, Disney+, HBO Max, Peacock and Paramount+ together invested over $8 billion in producing and commissioning original content in 2021. 

Behind this bald statistic lies a tale of a heartening rebound in content expenditure after severe damage in the previous year by ad spend cut-backs and production halts during the earlier phases of the COVID-19 pandemic.

Buoyed by the ramping up of 5G services in several parts of the globe, companies have reported remarkable success in high-quality video streaming. Growth has been driven by subscription video-on-demand (SVoD) platforms; and, as a logical corollary, global content spend has seen double digit growth, with virtually all major broadcasters upping their investments in improving the quality of their content.

Specifically, investment in content by commercial and public service broadcasters rose 14% in 2021, to touch a projected figure of US$220 billion, an increase of over $20 billion in comparison with 2020.

Despite this recovery, content spend from the five big groups mentioned above remains below 2019 levels, largely due to ongoing pressures on revenue (primarily TV advertising revenue) – a consequence of a mixture of viewing shifts to online video, and lingering economic effects influencing advertiser expenditure.

However, subscription OTT services increased investment in content by 20% in 2021, to nearly $50 billion. Compared to 2019, this represents a growth of over 50%, a factor of the success of the streaming market during lockdown.Hannah Walsh, Research Manager at Ampere Analysis, says, “In 2022, we expect content investment to exceed $230 billion, primarily driven by subscription streaming services, as the battle in the original content arena intensifies – both in the US and in the global markets which are increasingly key for growth.”

Netflix continues to dominate SVoD content investment, contributing 30% of total SVoD content spend and 6% of total global content investment in 2021. Netflix is the third largest investor in professional video content at a group level ($14 billion), behind Comcast and its subsidiaries ($22.7 billion), and Disney ($18.6 billion).

“Comcast and Disney invest heavily in sports rights, which – alongside their hefty investments in original content – contributed to their leading positions in the table,” says Walsh. “Sports rights made up over a third of both Comcast and Disney’s content spend in 2021.”

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