Is a Streaming Industry Slowdown on the Horizon?

Ampere Analysis projects that streaming companies will spend over $26 billion on video content this year, but that a crowded market comes with potential future consequences.

Annual spending on streaming video content will grow to a record $26.5 billion this year, a 14% year-over-year increase according to a study from Ampere Analysis published March 23. However, the increase also heralds a slowdown on the horizon in the overall on-demand streaming video market.

As Ampere notes, however, streamers are expected to take a more cautious approach to growing original film and television offerings as 2023 rolls on as they review budgets. Overall, the most successful companies will not be the ones that spend the most on original offerings, but rather those that can adapt most quickly to a streaming market that’s as crowded as ever.

Where the Numbers Come From

Ampere analyst Neil Anderson noticed that in 2021, scripted content spending hit $13.7 billion, with unscripted accounting for $2.3 billion. In 2023, those numbers are expected to hit $23.4 billion and $3.1 billion respectively.

“While scripted programming remains the bedrock of investment, there has been recent growth in unscripted commissioning, with the number of unscripted projects from global SVODs [streaming video on demand] rising by 35% in 2022,” Anderson wrote in the report. “Growing unscripted commissioning activity has not resulted in a redirection of spend.”

Ampere Analysis’ year-over-year breakdown of scripted vs. unscripted streaming video on demand original content spending

Why Should Streaming Companies Be Cautious With Spending?

“[A]s the competition in the streaming industry continues to grow, platforms must continue to explore cost-effective unscripted formats to keep audiences engaged, emphasizing the importance of balancing quality and affordability in optimizing content strategies,” Anderson said in his report, writing that the total number of unscripted streaming projects grew by 35% in 2022.

On a related note, Ampere Analysis broke down the top genres within which streamers are spending the most original programming money as things stand. Crime & Thriller spending leads the way at 24% of the overall total, while Reality and Documentary — two leading unscripted categories — combined for just 9%. That proportion will likely need to change if the most sustainable streaming future is to be realized.

The Ampere report maintains that Sci-Fi & Fantasy is the No. 2 category for streamers (20%), followed by Comedy (13%), Kids & Family (10%), Drama (8%), and Romance and Action & Adventure (both 7%).

The Streaming Road Ahead

As The Hollywood Reporter notes, Netflix advised its staff in 2022 to spend subscribers’ money more wisely; it has been more judicious about declining to renew shows it considers to be underperforming. It would be reasonable to expect that other streamers either are doing are will do the same as layoffs and other cost-cutting measures continue to be a major subject in the industry.

Overall, Anderson forecast a slight 1% increase of $136.4 billion in original content spending across the entire media landscape beyond simply SVOD. In the years ahead, the report expects numbers to stagnate from there or potentially face a proper downturn.