• by Wayne Friedman , November 28, 2023

Although there has been a push for streamers to cut TV/movie spending, look for major platforms to keep funding billions on new TV and movie content, according to analysts from Bernstein Research.

In particular, this means new TV shows and movies. For example, Bernstein Research estimates 85% of “content consumption” over the last three years on Netflix was produced in the last three years.

Nearly 90% of the content streamed globally (3.27 billion hours) from February 27 to March 19, 2023 was introduced in 2021 or afterwards. 

He adds that spending billions for new TV/movie content yields more streaming viewing minutes, which in turn means higher average revenue per user per month (ARPU). 

“Engagement is the single most important metric measured in media -- both linear and streaming alike,” writes Laurent Yoon, media analyst for Bernstein Research. 

And this is not just true for Netflix. According to the research, “engagement level explains 92% of the variance in ARPU across DTC platforms.”

What about older, library content? Not so much. “Our data shows that the absolute depth of a platform's library has little prediction over engagement,” Yoon says.

Still, there are some exceptions. Streamers can do well, when an old show is new to its platform. For example, the USA Network show "Suits" has had an amazing run on Netflix this past year. 

The show topped the streaming charts, in terms of minutes viewed over new and other content of other streaming platforms, for several weeks this year.

Netflix is estimating content spend to be $17 billion in 2024, with Walt Disney at $25 billion (including sports-rights fees).

Some analysts have suggested that a maturing streaming business with expected slowing new subscriber growth would result in stagnant or lowering content spend.