Broadcasters Will Find It 'Increasingly Harder' to Compete for Super-Premium Productions

LONDON—Traditional broadcasters will find it increasingly difficult to compete with streaming services for “super-premium” content according to one media analyst.

Tom Harrington from Enders Analysis told TVBEurope Amazon's reported $250 million deal to secure the rights to JRR Tolkien's “Lord of the Rings” will not be the last time a streaming service will win out over traditional TV.

“The traditional broadcasters are already worried in terms of these large super-premium productions because they can’t afford them on their own,” said Harrington. “They have to go into co-productions which inevitably they wouldn’t have done previously. 

“It’s somewhat difficult for them in terms of major super-premium scripted dramas like this because most broadcasters have to provide 24 hours of entertainment across a different number of channels whereas streaming services can concentrate their not inconsiderable spend on particular projects. At the moment it does tend to be these big one-offs, but it is going to become more and more difficult for traditional broadcasters to win those auction-type arrangements for major productions.”

According to Harrington, the deal is a major win for Amazon. “In terms of video, Amazon has had a bad few months and they need a win. Amazon has been worried that they haven’t had a hit in the way Netflix has with 'Stranger Things.' So they’ve gone back to the easiest way of acquiring a hit, which is acquiring IP which has shown to be very successful in the past. A lot of people were in the market for this so Amazon has gone above and beyond to ensure they’ve got what they think will be a guaranteed winner.”

“This is a piece of IP that has shown to be successful and you can turn that into entertainment that a lot of people will like. That’s a lot different to developing your own stuff and being able to take all the credit for it. It’s still viable, it's just a more expensive way of creating content.”

According to reports, Amazon has paid $250 million for the rightssaid to be one of the biggest TV rights deals ever. Amazon has already given the go-ahead for a multi-season series set before the events of “The Fellowship of the Ring.” It's thought the deal will also allow the streamer to create a potential spin-off series.

The series will be produced by Amazon Studios in cooperation with the Tolkien Estate and Trust; HarperCollins; and New Line Cinema, a division of Warner Bros. Entertainment.

This story originally appeared on TVT's sister publication TVB Europe