Yahoo Movies Netflix and Amazon Dominate Commissioning by Streamers, Tilting the Content Market Away From U.S., Towards Local: Study
Netflix and Amazon returned to dominance in commissioning of original content worldwide in the first quarter of this year, according to research and consultancy firm Ampere Analysis.
The pair had been challenged in recent years by the launch of studio-backed streaming platforms, but the studio players have cut back as a result of the Hollywood strikes, rising costs and pressure from Wall Street to prove that they can grow profitably.
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Ampere said that Netflix commissioned its highest number of new titles since the third quarter of 2021, and that Amazon set a new record for quarterly commissions. The two streaming giants accounted for more than half (53%) of worldwide streamers’ commissions from January-March 2024.
The report also showed that both Netflix and Amazon now order “the majority of their titles from outside the U.S.,” as a result of market saturation in the U.S. and in line with their strategy of addressing local markets through local content. And the research firm predicted this trend will continue.
Netflix’s commissioning growth focused on West European and Asia-Pacific titles, in particular. “In Q1 2024, Netflix’s Western European commissions almost achieved parity with North American titles for the first time,” Ampere said. “Netflix is seizing the opportunity for international growth, focusing on proven market providers of portable content such as Spain, India, and South Korea.”
Cost-effective unscripted content featured heavily in the platform’s Western European commissions, with documentaries accounting for 30% of regional orders, up from 23% last year.
In Asia, Thailand experienced the biggest individual increase with nine titles ordered in Q1 2024. Crime and thriller content was a focus in India, which is Ampere predicts will become Netflix’s largest subscriber hub in the region.
In terms of subscriber numbers, Netflix trails several Indian streaming players, but its price point is higher. And Ampere says that it is seeking to compete more closely with Amazon in the country.
“Netflix is increasingly reliant on ‘pay-one’ agreements with theatrical studios for its supply of new, exclusive U.S. films, and has decreased its commissioning of original [U.S.] movies. By contrast, it has upped its international movie orders in territories like the Nordics, Asia Pacific and Sub-Saharan Africa,” said Ampere.
Amazon is focusing on India, in particular. In the first quarter of 2024, Amazon’s commissioned a record slate of 37 titles in India.
“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,” Ampere said.
Amazon also announced its largest slate of Indian original movies to date and is actively pursuing pay-one and co-financing deals with [Indian] theatrical distributors. Amazon’s original movie ordering, generally, has been boosted by its takeover of studio MGM two years ago. Numbers overtook Netflix for the first time in the second quarter of 2023.
Germany, where Amazon leads Netflix in terms of local subscribers, was the biggest winner in Western European commissions, with 13 content orders in the first quarter of 2024.
“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. While several studio-backed SVoDs have made cutbacks internationally, these two streaming giants are doubling down on their localized global strategy,” said Mariana Enriquez Denton Bustinza, senior researcher at Ampere.
But she also sought to differentiate between their strategies. “For Netflix, this means catering to a broad subscriber base while leaning on markets whose productions offer the greatest potential for crossover appeal. 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.”
Not mentioned in Ampere’s report: Amazon also claims mutual benefits from online entertainment and home shopping, or a “flywheel effect,” in those markets where it operates shopping membership plans.
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