TV Production Outlays Climb To $100 Billion

Here’s a new number to ponder over connected-to-premium TV scripted content: $100 billion a year.

The sum comes from David Nevins, now Chief Creative Officer, CBS Corp. It is the collective cost traditional and new media companies could spend in total in the next year on big TV and movie content.

All of which gives some media company executives pause. “How do you get a return on that?” asks Greg Maffei, president-CEO, Liberty Media, on CNBC.

Some projections are Netflix will spend $12 billion next year, up from $8 billion this year. But that isn’t the real news. Amazon, which has tons of cash, could soon move past Netflix content spending.

Right now, there’s about $85 billion a year being spent on TV-movie content, going to $100 million in two years, says Nevins  -- 70% being spent by traditional TV companies; 30% from new digital/technology companies.



Add in WarnerMedia, NBCUniversal and Walt Disney spend, around $10 billion each. You can quickly see where this is going.

And that’s not all. Apple is looking to find singular content to fill over 1 billion of its high-priced mobile phone, tablet, and laptop devices.

Of course, premium TV/movie content doesn’t live in a vacuum. It competes with other stuff -- non-scripted content, social media and video games.

So why spend so much money on original premium content? In part, to fuel new digital platforms, in particular, new brand-centric OTT app-platforms to gain some direct-to-consumer independence from third-party pay TV network distributors, like cable, satellite and telco companies.

For many, there is some irony here: This goes against the still-current TV ecosystem perception of ‘aggregation’ of TV and/or movie content. Maybe media consolidation will be working in another way.

From Maffei’s perspective, the only hope is the rising growth of supposedly great, must-have, can’t-wait-to-see TV shows, which will command higher pricing from consumers. 

Traditional “cord-cutters” -- and even regular card-carrying pay TV consumers -- continue to say otherwise. Content under a supply-and-demand economic metric should win the day, which, in turn, means a $100 billion boat of content money will be a tough number to keep afloat.

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