Netflix, Amazon drive SVOD original orders in Q1, international in focus

As studio-backed streamers make cutbacks on their content spend Amazon and Netflix are doubling down on their localized global strategy, according to fresh data from Ampere Analysis.

In the first quarter this year, Netflix commissioned its highest number of new SVOD titles since Q3 2021, and Amazon set a new record for its quarterly commissions, per the Ampere report.

“This resurgence in Original orders coincides with falling commissions from cost-conscious rival streamers, which meant the two streaming giants accounted for more than half (53%) of all SVOD commissions globally in Q1,” wrote Ampere.

Interestingly, this increase in orders is being directed to countries outside of the U.S.

Over the past few years, spend outside of the U.S by the Netflix and Amazon has increased steadily. Ampere predicts it will continue to rise as the streamers attempt to combat domestic subscriber stagnation by chasing expansion internationally.

Disney spends most on original content
Analysis exclusively shared with StreamTV Insider by Ampere shows Disney leading major studios and streamers in terms of overall spend on content for 2024.

As a group – across subsidiaries including linear networks, theatrical studios and streaming platforms – Disney is forecast to spend $36.1 billion on content in 2024, of which $16.5 billion is on originals, $10.3 billion on acquired film and TV and $9.4 billion on sports rights.

NBCU and Sky Group parent Comcast, in second, has a projected $24.8 billion total content spend pot, of which $10.8 billion is on original content, $4.6 billion on acquired content and like Disney, over $9 billion on sports rights.

Pureplay SVOD Netflix is expected to spend roughly half of Disney’s originals budget on its own original titles this year. Netflix is expected to invest $8.5 billion on originals and about the same amount on acquired film and TV, bringing its 2024 content purse to $16.8 billion.

Warner Bros. Discovery’s projected spend on originals outpaces all but Disney. Its $11.5 billion original content investment anticipated in 2024, added to $4 billion on sports rights and $1 billion on acquired content, brings WBD’s total expected content spend this year to $16.4 billion, per Ampere.

Paramount is projected to spend $15 billion on content, of which $9.3 billion is originals and $2.1 billion is acquired content. Since release of Ampere’s analysis Paramount announced a merger with Skydance Media, so whether that means changes for original content spend remains to be seen.

And despite its record quarter of commissioning original titles in Q1, of the six studio-backed streamers analyzed, only Amazon is spending more on acquired content than it will on originals in 2024: $6.6 billion versus $5.9 billion, per Ampere’s forecast.

Note on methodology: Ampere’s 2024 content spend forecast is generated through proprietary models, incorporating year-to-date results, company guidance and analyst sentiment. The totals reflect global P&L (profit and loss) content spending, categorizing content investment as an expense rather than on a cash basis. All totals are at group levels and includes spending across subsidiaries including linear networks, theatrical studios and streaming platforms.

Risky but rewarding
“With 70% of Netflix subscribers located outside North America, producing and licensing local content remains crucial for fostering organic subscriber growth and minimising churn,” noted analyst Neil Anderson in an earlier Ampere study.

He judged the strategy “a risky but rewarding proposition”. Production of international originals have helped to shield the streamer from the impact of the US actors’ and writers’ strikes but now subscribers, particularly outside the U.S, “expect a steady supply of freshly curated, localised content,” Anderson said.

Meanwhile, Paramount Global and WBD have scaled back their international commissioning activity, “redirecting focus to Hollywood franchises, films, and TV series for a more secure investment amid economic uncertainties.”

Netflix mines Europe and APAC
Ampere’s latest report goes deeper to reveal that Netflix is on a commissioning drive in West European and Asia-Pacific territories.

In Q1 2024, Netflix’s Western European commissions for the first time were nearly on par with North American titles. Asia Pacific titles also ticked up notably. According to Ampere, “Netflix is seizing the opportunity for international growth, focusing on proven market providers of portable content such as Spain, India, and South Korea.”

Specifically, “cost-effective unscripted” content featured heavily in the platform’s Western European commissions from UK, Spain, and Germany. Documentaries accounted for 30% of regional orders, up 23% year on year.

While South Korea is a proven market for internationally popular content (Netflix will be anticipating a sizeable ratings uplift when it releases Squid Game 2. The streamer has not announced a launch date but has begun teasing its release), it is Thailand which could generate the next break out hit. Netflix ordered nine titles in Q1 from the country.

Ampere predicts India will become “Netflix’s largest subscriber hub in the region as it seeks to compete more closely with Amazon in the country,” and where crime & thriller content was a focus for the streamer’s commissions in Q1.

Simultaneously, Netflix has decreased the number of feature films it is commissioning from the U.S – instead turning more often to pay-one agreements with theatrical studios – and increased its international movie orders from the Nordics, Asia Pacific, and Sub-Saharan Africa.

Amazon focus on India
India is a major focus of Amazon Prime Video with Ampere counting 37 titles ordered from the country in Q1 alone – representing more than the prior six quarters combined.

“Global streamers, including Amazon, have previously struggled to compete with local players that offer strong regional content. However, this total signals Amazon’s intention to take on the incumbent platforms, cementing India as the cornerstone of its international strategy,” said Mariana Enriquez Denton Bustinza, Ampere senior researcher.

In Europe, Amazon has upped its orders of originals from Germany to 13 this quarter (the previous high mark from Germany was seven in Q1 2021).

She added, “The market saturation in North America, the growing cost of production, and the lingering impact of the Hollywood strikes have pushed Netflix and Amazon to increase investment in international productions to stimulate subscriber growth.

“Netflix [is] catering to a broad subscriber base while leaning on markets whose productions offer the greatest potential for crossover appeal. Meanwhile, Amazon’s approach remains more heavily targeted towards key markets such as India, while it leverages its global position to expand further into the theatrical market to generate downstream revenues from its platforms.” StreamTV Insider