This story was delivered to BI Intelligence "Digital Media Briefing" subscribers. To learn more and subscribe, please click here.
The number of original scripted series on cable and broadcast TV has declined for the first time since the metric has been tracked in 2009, according to FX Research.
While the total number of scripted original series actually increased by 8% year-over-year to 455 shows, all of that growth is due to the rise of online services. These services — Netflix, Amazon Prime, Hulu, and Crackle, among others — more than doubled their output to 93 scripted shows in 2016.
This surge follows an increase in investment from digital players, which now rival some of the largest traditional media outlets in spending on original content. Netflix is expected to invest $5 billion on original content in 2016, according to data from SNL Kagan and Boston Consulting Group. That tops two legacy powerhouses in NBC ($4.3 billion) and CBS ($4 billion), and trails only ESPN ($7.3 billion). Meanwhile, Amazon is expected to invest a noteworthy $3.2 billion by year-end. Most notably, Amazon offered $250 million to Jeremy Clarkson, Richard Hammond, and James May, to bring The Grand Tour to Amazon Prime.
And Netflix and Amazon will continue to aggressively grow their investments in content over the next year. Netflix stated in its Q3 earnings report that it will spend $6 billion next year on content, a one billion increase from this year. According to Ted Sarandos, chief of content, the company wants its original and exclusive content to comprise half of its total catalog over the next few years. Similarly, Amazon CFO Brian Olsavsky revealed that Amazon would nearly double its investment in video and triple the amount of Amazon original content through 2017.
On the traditional TV front, the average number of TV channels viewed by American adults fell for consecutive years, according to a Nielsen report. While the figure only dropped by a marginal amount — to 19.8 in 2016 compared with 20.9 in 2014 — the number of channels received, on average, by an American adult decreased for the first time in eight years. This further hints at the impact of cord shaving, as traditional TV channels continue to be replaced by other sources such as subscription-video-on-demand (SVOD).
Growth of subscription-video-on-demand (SVOD) services in the US has slowed considerably over the last year as competition in the online video streaming space intensifies. Heavy hitters like Netflix, Hulu, and Amazon Prime are increasingly squeezed by new competitors with exclusive content and niche video offerings.
International markets, and specifically, the Asia-Pacific (APAC) region will be paramount for both established SVOD players and new entrants looking to establish themselves in the successful video space.
The SVOD market in the APAC region is poised for explosive growth over the next five years due to increased mobile adoption, amplified broadband expansion, and enhanced purchasing power.
Dylan Mortensen, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on subscription video on-demand that explores how slowing SVOD growth in the US will lead to a surge in the APAC region.
Here are some of the key takeaways from the report:
- While SVOD services are increasingly rooted among US households, growth is beginning slow. Growth in North American SVOD subscriptions is set to fall from 30% in 2014 to 4% by 2018.
- The best opportunity for continued growth lies in the Asia-Pacific (APAC) region. The region had nearly 42 million SVOD subscribers in 2015, but could have up to 158 million by 2021.
- The increasing adoption of smartphones and mobile data is propelling growth in mobile video viewing across APAC, which is poised to outpace the rest of the world.
- Rising purchasing power in APAC underlines the opportunity for online video services. China and emerging Asian economies represent nearly two-thirds (63%) of global economic growth.
- Content creators and marketers stand to gain from SVOD’s push into the APAC region. Content creators can benefit from the surge in short-form video, while marketers can capitalize on advanced product placements.
In full, the report:
- Forecasts SVOD subscribers in the APAC region.
- Explores the factors behind SVOD’s slowing growth in the US.
- Breaks down reasons why APAC is ripe for massive online video growth.
- Discusses who will benefit from SVOD growth in APAC.
Interested in getting the full report? Here are two ways to access it:
- Subscribe to an All-Accesspass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. » START A MEMBERSHIP
- Purchase & download the full report from our research store. » BUY THE REPORT