LONDON—They say you have to spend money to make money, and Netflix and Amazon have been subscribers to that theory as of late. The online OTT platforms have poured a lot of money into original programming, spending a total $7.5 billion last year according to IHS Technology. That combined number is higher than individual spending of big name broadcasters like HBO, CBS and Turner.
Between 2013 and 2015, Netflix and Amazon more than doubled their annual expenditure on programming. Amazon has increased its spending from $1.22 billion to $2.67 billion, while Netflix has jumped from $2.38 billion to $4.91 billion. It’s not just Netflix and Amazon, though; IHS reports that Hulu and online platforms in China have increased their original programming investment. The only traditional broadcasters that top the likes of Netflix are Disney ($11.84 billion) and NBC ($10.27 billion).
Back in 2012, there were only three online scripted U.S. TV shows. So far in 2016 there have been 57.
“In what Netflix calls the era of internet TV, more and more consumers are watching content online, shaking the foundations of the traditional TV industry,” said Tim Westcott, senior principal analyst at IHS Technology. “However, it’s premature to declare that the era of linear TV is already over, and Netflix and Amazon have come hard on the heels of a boom in production of original drama and comedy by the likes of AMC and FX in the U.S.”
On the global market, the U.S. is the worldwide leader in programming, making up an estimated 33 percent of worldwide expenditure at $43 billion invested across free-to-air, pay TV and online, per IHS.