The 500 Scripted Series Universe
- by Joe Mandese @mp_joemandese, March 6, 2018
It’s been a quarter century since cable TV pioneer John Malone coined the concept of a “500-channel universe,” sparking advertising and media industry debate about the implications for the hyper-fragmentation of the world's greatest and most effective mass medium. Twenty-five years later, the “television” universe has exploded into streams of cable, satellite and over-the-top video services that make Malone’s vision of an “information superhighway” look quaint by comparison, but new data suggests that 2018 could be the year we look back on when we entered the 500 scripted TV series universe.
According to an analysis of data from FX Networks published Monday by the equities research team at UBS, there already were 487 scripted original series competing for viewers’ attention in 2017. Based on the recent rate of progression, 2018 should easily surpass 500.
The expansion has been driven by heavy investment from subscription video services such as Netflix and Amazon, which are pacing to spend more than $10 billion and $5 billion, respectively, this year.
The heavy investment by these non-ad-supported viewing options was a major reason why Publicis Chief Growth Officer Rishad Tobaccowala recently projected that the supply of consumer ad impressions will decline as much as 30% over the next five years, as consumers divert their attention to advertising-free environments.
Aside from the obvious implications for advertising -- and ad-supported television programmers -- the rapid expansion in the supply of high-quality programming options could lead to a paradox of choice for consumers and advertisers, alike.
Not surprisingly, analysts expect the hyper-accelerated level of original series investment to taper off due to fundamental economics.
“Beyond 2018, we estimate the arc of cash content growth to slow considerably given the law of large numbers and Netflix's content density & efficiency from several years of heavy investments,” the UBS analysts predict in their report.
Joe, I assume that there is supposed to be a connection between the number of original dramas and sitcoms available and Rishad's theory that the amount of viewing time available for advertisers to exploit via commercials might diminish by 30%----but I'm having trouble seeing it in these statistical tables. For example a large amount of viewing is done to "off-network" scripted shows mainly on cable but also largely via syndication on independent stations as well as on OTT and digital venues. In addition, the relative number of original scripted shows introduced or continued each year rises or falls depending on the use of other formats, notably "reality fare". So one reason that the broadcast networks relied less on dramas and sitcoms in 2017, may well be an increase in their use of cheaper, hence more cost effective, reality shows.
I think that the underlying assumption for Rasid's theory is his assumption that "linear TV" is going to lose a very large amount of its viewing tonnage to OTT/streaming/online content---much of which will not---it is assumed---carry ads. That's fine, however the number of original dramas and sitcoms, even augmented by all of the other types of content---reality, talk, variety, game shows,news, sports, movies, etc.--- does not automatically correlate with audience or time spent measures. For example, premium cable---HBO, Starz, etc.---uses original scripted shows to lure subscribers to cable systems and other program distributors. but the fact that such programs were about a third as common as their counterparts on the broadcast TV networks in 2017 does not mean that the amount of time spent with HBO, Starz, etc was a third as much as attained by all of the content presented by ABC, CBS, NBC, Fox and The CW networks.
A similar comment applies to the estimates on programming spend---btw, are these intended to represent pure program production costs or do they include staffs of programmers, lawyers, researchers, the costs of pre-testing, Nielsen ratings, distribution expenses, etc? In any event, if Netfklix spends $8-9 billion purely on program content, it's buying a good many original and very pricey dramas, I assume. However if NBCU is spending $15-16 billion---again on the same basis----much of this goes for much more cost effective---in relation to audience---reality shows as well as off-network fare that fuel NBCU's cable channels, as well as very modestly budgeted news, talk-variety and reality fare on NBC, itself. In short, a dollar spent on origional content by Netflix, HBO, or NBCU does not necessarily buy the same type or quality of content and the audience dynamics as part of the respective business plans is very different.
@Ed Papazian: Sorry about that. The connection is implied: The growth in original scripted series has been fueled by non-ad-supported sources like Netflix, Amazon, etc., which are replacing time consumers would have otherwise spent with ad-supported ones like TV networks.
The appeal of non-ad-supported options is one of the factors Rishad Tobaccowala cited for his 30% projection.