How Hollywoods Horrible 2022 Impacted Content Spending

The big media market correction of 2022 has finally ushered in a new era of austerity for Hollywood. Studios are now trying to cut costs and increase profits in their consumer-facing operations as the boom phase of the streaming wars comes to an end for good.

As part of that reduction, a reduction in the content of the long-standing mandate is starting to appear on companies' balance sheets as the industry officially closes its books in 2022.

Netflix, long the leader in DTC content spending, is cutting its spending by about 5% in 2022, from $17.7 billion in 2021 to $16.84 billion last year. . Discovery Warner Bros., which has yet to report full-year results, is expected to cut costs even further; Morgan Stanley analysts estimate that WBD will spend $18.3 billion on content in 2022, 20 percent less than WarnerMedia and Discovery's combined 2021 figure.

While spending at other major media and tech companies has grown steadily over the past year, there are still signs of cuts across the board.

Disney spent $29.9 billion on content in the fiscal year, a record for the company but well below the $33 billion estimated earlier this year. While this year's spending will remain in the "$30 billion range," CEO Christine McCarthy explained in an earnings call last week that Mouse House will cut $3 billion in non-maintenance annual spending. if there was time.

NBCUniversal's spending also increased in 2022, although it roughly doubled in the last two years before the pandemic, 2019 and 2021. CEO Jeff Shell recently indicated that 2023 will be the peak of streamer spending for the company represented by Peacock. , but it may have to cut spending quickly if the Wall Street firm is disappointed by DTC's losses.

And then there's Amazon, whose financial prowess has helped shield it from Hollywood turmoil, even as the tech giant faces its own financial woes of late. Amazon's "total video and music spend" rose 28% in 2022 to $16.6 billion in 2021 from $13 billion, driven by big Prime Video programs like Rings of Power. and NFL Thursday Night Football.

Amazon CEO Brian Olsavsky added that "about $7 billion" of the budget was spent on "Amazon Originals included with Prime, live sports and third-party licensed video content," up from $5 billion the previous year.

At the very least, it looks like industry belt-tightening will continue in the new year. Unless content spending at most major media companies declines significantly over the long term, the rate of growth in studio spending, especially streaming content, is likely to slow significantly in the near future.

Ampere's analysis predicts that global content spending will increase by just 2% year-over-year to 2023, the slowest growth in more than a decade (excluding the low numbers of COVID 2020).

However, the overall figure today is still much higher than in pre-war times. Hollywood increasingly faces the difficult proposition of cutting costs without hampering the growth of streaming, and must-see programming will remain a key investment even after the off-peak days of prime TV are over.

As chaotic as last year was, this year could be even more chaotic as the big players try to figure out the right strategy through the only method possible: trial and error.

ALL OF WOKKE CULTURE'S POOR | and the influence of feminism