In recent years, the streaming wars have been full tilt, with companies like Netflix, Amazon Prime, Disney+, and HBO Max all trying to out-spend each other to deliver the most buzzworthy shows. The most prominent example is Amazon’s hellishly costly foray into Middle-earth: The Lord of the Rings: The Rings of Power. According to The Wall Street Journal, Amazon spent $715 on the first season. Industry expert Robert Fishman thinks this represents the “peak of the bubble” for the streaming wars; it’s all downhill from here.
The past two years have seen companies spend crazy sums of money on content; from HBO’s The Last of Us, to Netflix’s The Sandman, Disney’s various MCU shows, and so on. Per Next TV, Fishman projects a substantial drop in the cost of projects this year. “After two years of strong double-digit content spending growth, we foresee a flattening in 2023,“ he said. “As more companies shift their focus away from solely subscriber growth, we would expect industry content spending to be relatively flat or even decline in the out years.”
Given the current financial climate, it makes sense for networks to scale back. Money is no longer being thrown around everywhere, particularly after expensive projects that may not be worth it. Decisions will have to be more carefully considered.
After years of wild spending, Wall Street now wondering if streaming is a good business
“As we now painfully know, money is no longer cheap,” Fishman continued. “Wall Street’s attitude towards streaming has now largely reversed course as more skeptics raise the question of whether streaming is a good business (a question we have long been asking). In turn, companies are no longer willing to spend whatever it takes, in part because attitudes and strategies have shifted and rationalized, but also because their balance sheets no longer have what it takes.”
Money isn’t flowing as freely as it once did. In a recent report from Vanity Fair, Disney announced that it lost subscribers at Disney+ for the first time during the last three months of 2022. Meanwhile, HBO Max revealed slightly more positive subscriber gains. Netflix remains confident of further growth.
Of course, we should still expect big-budget projects to make their way to our screens. Amazon is moving forward with The Rings of Power season 2, which will be cheaper to produce after building the foundation but still cost a hefty sum.
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h/t Fierce Video