As Content Budgets Are Tightening, Peak TV Could Continue via FAST Channels
Peak TV programming, or the overabundance of original shows, films, and series that have landed on broadcast, cable, and streaming outlets in the past decade, may be on its way out, or at least slowing down. Companies are slashing budgets and cutting costs, making it appear that consumers are going see a pullback in the number of titles being released for the foreseeable future. However, as advertising revenue prospects increase, there is the possibility that the draw of free ad-supported TV (FAST) might keep all of that original content flowing, at least for the time being.
Budget allowances for original content spending appear to be dropping across the board as Warner Bros. Discovery CEO Davis Zaslav cuts projects left and right and Netflix has apparently placed a cap on its spending for the next several years.
While content spending remains up over its pre-pandemic totals in 2019, for nearly every outlet in the industry, that has more or less leveled out. The one major exception has been Disney, who — thanks to its ownership of ESPN — continues to increase its content budget thanks in no small part to the ballooning price of live sports rights.
Because of these budgetary pullbacks, the number of original titles being released each year is expected to at least level off, if not recede. However, with hundreds of new series and movies being released on streaming every year, there’s no guarantee that consumers will even notice.
Additionally, as FX chairman John Landgraf noted at last week’s virtual Television Critics Association press tour, since most major studios have already moved launched their own streaming services, it is unlikely that a new platform will come onto the seen with a new crop of streaming originals. That is why Landgraf — who coined the term “peak TV” in 2015 — said that he believed that 2022 will be the apex of TV boom.
With an economic climate in flux, and production prices soaring, increasing spending on originals seems to be taking a back seat to standard operating costs. However, a recent white paper from Samsung suggests that a lack of original programming might be responsible for excessive churn as consumers drop subscriptions because there is not enough compelling content on a given platform to keep them engaged. Without original series and movies to keep customers’ attention, there’s little reason for them to stick with a particular service when they can be just as entertained by another.
Disney+ appears to be doing well in this regard as it regularly releases new content for its premiere properties. With “The Mandalorian,” “Obi-Wan Kenobi” and the upcoming “Andor” Star Wars series, as well as the library of Marvel TV shows, the House of Mouse seems to understand how impactful fresh content is for its viewers. As it prepares to unleash its ad-supported video-on-demand (AVOD) subscription tier, Disney should be in a good position to continue providing value no matter how its customers access its content.
While the service’s total number of originals is still behind those of its biggest competitors at Netflix and HBO Max, the number of new titles appears to be growing unabated for Disney+, while other streamers are pulling back.
The one hiccup in Landgraf’s declaration is that as the rise of advertising-supported streaming continues to become more profitable, there is the very real possibility that free ad-supported TV (FAST) channels will mimic their linear and subscription streaming predecessors and invest heavily in originals as a way to attract and retain viewers. Free streamers Tubi and Crackle are already buying into that strategy as Crackle has been investing in original programming for years and Tubi has announced over 100 original titles coming to the service.
While FAST services certainly won’t have the same budgetary strength as Hulu or Netflix, original programming should help make them more attractive to prospective viewers. As streamers move more into an ad-supported model, they may need to shift some of that additional revenue to bolster their original offerings and draw in more subscribers. With the alternative being free options with commercials, it’s going to be difficult for the streaming big boys to convince consumers that shelling out extra cash for commercial-laden TV is really worth the price.