Streaming Wars to Cost $16 Billion in Next Four Years as Companies Try to Gain Market Share, Study Finds
While the streaming wars have provided us with a slew of content to choose from now — from Disney+’s “The Mandalorian” to Apple TV+’s “The Morning Show” — new reports are finding that entertaining audiences is coming at a high price for new and long-standing streaming services.
According to a new study by MoffettNathanson, when all is said and done, the streaming wars are going to cost Disney, Netflix and WarnerMedia $16 billion dollars because of the amount of content they have to churn out.
MoffettNathanson reported that sports fans are likely to stay with traditional pay TV, because “big, expensive licensing deals for sports like football remain locked up with traditional TV networks, and those networks aren’t leaving the bundle anytime soon.” However, there are roughly 13 million people who don’t watch sports or news and are expected to unbundle. Those are the viewers most streamers are targeting.
In order to get a share of these audiences, MoffettNathanson predicts Disney, AT&T and Netflix will spend $16.2 billion more on content over the next four years. However, this spending hike is only expected to last a few years as we are currently in the land grabbing phase right now. Once its clear who has the market share, spending is expected to taper off.
MoffettNathanson’s findings are consistent with recent news. In August, the Financial Times reported that Apple had upped its content budget from $1 billion a whopping $6 billion. In October, it was also reported that Netflix was looking to raise $2 billion in debt in order to buff up their content budget. This was in addition to the $15 billion they slated for this year.