Streaming Wars price is expected to top $140 billion this year
The price of admission for those fighting the streaming wars will continue to rise, and is expected to jump 10% in 2022 to $140.5 billion for the nine largest media and technology companies, according to Wells Fargo.
The numbers are also expected to continue to rise in coming years, reaching $172 billion in cash spending by 2025, according to Wells Fargo projects. These expenditures are driven by competition to attract and retain subscribers, expand programming to reach wider global markets, and provide coverage of sporting events. At stake is leadership in a transformed media company that directly connects media companies to their customers in markets around the world.
Disney leads in spending
That’s a big jump from last year’s $25 billion, but in fact, it may not be enough for the Hollywood giant as it tries to maintain its many lucrative legacy operations while providing enough original content to attract and retain subscribers who can easily cancel and sign up. with competitors.
In fact, this is the challenge facing all Hollywood media companies as they compete for market relevance against the deep pockets and diverse online video offerings of Netflix and tech giants Apple. , Alphabet and Amazon, none of which is to power legacy film and TV. operation alongside new streaming offerings.
Netflix, which ranks fourth in overall spending (behind Disney, Warner Bros. Discovery and Comcast
Sports broadcasting rights represent a substantial part of the overall totals. Their cost has skyrocketed during recent network renewal negotiations with the NFL, NHL, NBA, English Premier League and other major European football leagues and competitions, as well as the Indian Premier Cricket League.
The NFL in particular has become vital to the continued existence of traditional broadcast and pay-TV services, its games featuring 75 of the 100 highest rated shows on TV last year, according to an analysis by Sportico. Other major sports leagues are also among the most important components of the traditional television ecosystem.
Discovery of Warner Bros.
And sports rights could become even more expensive in the coming months. Apple
Disney has plenty of reasons to keep its Indian Premier League exclusive, a major draw for its 44 million customers there (and more than a third of its global subscriber base). He will face strong bids for at least some of the rights to Sony’s TV division, recently merged with local giant Zee Entertainment. netflix
And still up in the air is what’s happening with the Sunday Ticket NFL offer, which DirecTV is moving away from.
Alphabet’s YouTube TV skinny bundle could be one hotbed of Sunday Ticket rights, as a premium sale to drive overall signups.
Another is Amazon, which has already invested $1 billion a year for the rights to Thursday Night Football broadcasts, and spent more to pick up the loss-making program a year earlier. With sportsmanship CEO Andy Jassy (he’s a minority owner of Seattle’s new NHL franchise), Amazon could also take over Sunday Ticket.
The continued cost of competition for eyeballs is starting to weigh on some media companies, which saw their shares tumble in the second half of 2021 and into the new year. Disney, for example, was down 21% today for its one-year high of nearly $202 per share, though it was up from $142 per share just after Thanksgiving.
Netflix, which peaked at $661 per share in mid-November, is back to somewhat more typical levels at around $540 or around 18%.
Other media companies are also seeing notable share declines as Wall Street investors have started looking beyond subscriber additions reported by media companies to look at other metrics such as churn. , market share and content spend.