Documentary Business

Peter Hamilton Consultants, Inc

Streamers vs Channels: A Reality Check on U.S. Video Entertainment Spending and What It Means for Producers

At Sunny Side of the Doc, producers packed into the presentation on Netflix’s documentary strategy.

  • But they were less interested in learning What Do We Want? from the many broadcasters, cablers & foundations who presented later.
  • The producers missed out on a lot of valuable information that could translate into new business.
  • Here’s why the production community is exaggerating the promise of the streamers and under-estimating the legacy buyers at the channels…

Where Do They Spend?

  • Spending by U.S. consumers on traditional distribution channels (MVPD) is declining, as you can see in the bar chart above.
  • But it is more than 5 times their spend on Netflix and the subscription streaming services.
  • That huge consumer expenditure means that the channels are continuing to green light originals at a combined scale that dwarfs the spending on production by online platforms.
  • The bubble chart below captures the dominance of consumer spending on channels (MVPD) versus all other distribution platforms.

  • (MVPD = Multichannel video programming distributor, like Comcast and DISH. vMVPD = Virtual MVPD that supplies channels via the Internet and without its own cable or satellite infrastructure.)

Netflix Documentary Spending

  • In a conversation at Sunny Side, several industry veterans estimated that Netflix’s 2019 spend on documentaries and Unscripted programs is around US$500 million.
  • That’s a fraction of the many billions in the combined worldwide spend on original factual programs by majors like BBC, ITV, ARD/ZDF, NHK, Discovery and Nat Geo.
  • And hundreds of millions more spent by all the smaller players combined… like Arte, Smithsonian, Planete, Reelz, SVT, ABC Australia and many such others.

What You Need To Know

  • Traditional broadcasters and channels are experiencing a profound challenge from the streamers.
  • The harsh psychology of a threatened business model is to cut back the volume of orders and on price points.
  • However, the Cab/Sat sunset is a relatively slow one, bolstered by the operators’ telephone and Internet businesses.
  • The vastly higher total spend by consumers on the channels means that networks are continuing to provide a much larger scale opportunity for producers than the streaming sector.

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