What Streamer's TV Catalogs Tell Us About Their Content Strategy
Keeping track of thousands of IPs across a dozen streaming platforms is a challenging task. With every passing year, streamers invest billions of dollars in net new content, and it's becoming a serious undertaking to keep track of their entire libraries.
The good news is that here at TSG, we are doing that work. We've scraped titles for the entirety of the streaming ecosystem to analyze their content library. With the available data, we set out to understand what their content catalog can tell us about their past and future strategy. Before we move forward, please note that we have excluded streamer's movie catalogs as this analysis's goal is to track TV properties and docu-series.
THE LAST DECADE IN REVIEW
Until 2018, Prime video dominated the TV content library, followed by Netflix and Hulu
Amazon Prime Video, since its launch, has been the massive spender with a quiet content strategy. Their strategy has been mainly centering around almost exclusively acquiring and licensing content in the early days. As seen above, the totality of their content library has dominated streaming Giant Netflix. Around 2018, Prime slowed down in content investment, which is likely due to the streaming wars ramping up with the other services being more aggressive with keeping their IPs in-house versus licensing them to Amazon.
Netflix, unsurprisingly, has been investing in original content, and despite the pandemic, analysts from BMO Capital Markets forecast the company will spend globally a whopping $17.3 billion for original content in 2021 – with an estimated 40% of this budget going in TV shows docuseries. Netflix is spending considerably more on original content than its rivals, in part because companies like Disney, NBC, and HBO have deep catalogs of content they can pull from to enrich their services. Some of those shows, like Friends and the entire Pixar collection, have been perennial hits for Netflix in previous years.
HBO has always focused on quality instead of quality; they are known to produce niche critically acclaimed shows but are not indifferent to the competition stemming from the streaming wars. With the launch of HBO Max in 2020, we've seen them increase their overall TV content library by +64% compared to HBO.
The great COVID Crash & its impact on tv
Amongst other industries impacted by the pandemic, COVID-19 has mainly affected the production of original TV shows across all platforms. With most of the studios unable to shoot for the first half of 2020, we forecasted fewer original content to be delayed, thus impacting the catalog of most streamers.
Netflix and Hulu saw the sharpest decline in new TV series added while HBO Max saw an uptick in content despite the pandemic impact
Hulu saw the sharpest loss in catalog entries as they added 50% fewer new TV titles Vs. 2019. As seen since 20215, Hulu's strategy for content has not been as aggressive; content development remained steady between 2015-2019 compared to the other competitors.
Netflix took the second sharpest loss with having to decline their content catalog by 30% vs. the previous year though they remain the streamer with the most extensive TV catalog.
HBO Max is the only streamer that increased its content library, which is due to its highly anticipated launch. Though HBO Max has added a significant amount of new TV titles, WarnerMedia is now betting on a riskier model meant to win in the short term. HBO's appeal will entice consumers with its blockbuster movies while sustaining their consumption with a few new compelling titles. The bet is to maintain viewers with casual viewing, so they are discouraged from unsubscribing if they know another blockbuster is due around the corner. Most of these shows had gone into development, production before the pandemic, so they were able to remain relatively unaffected in 2020.
The mix: original vs licensed content
Streamers are either negotiating new licensing deals for TV shows with networks and producers, or they are producing original content to keep growing their subscriber base. Licensing content involves obtaining rights from a TV show or movie owners to stream the content through a service. Creating original content consists of investing in their content production to create new intellectual properties that will ultimately lead to owning the rights.
With the exception of Apple TV+, Peacock and CBS All Acess, most of the streaming giant’s library is composed of licensed TV shows.
Paramount+ and Peacock are interesting platforms. Most streaming platforms are over-reliant on licensing but the only exception to this trend are the two Broadcast-turned streamers: Peacock and Paramount+ (formerly CBS All Access). These two services’ TV library doesn’t include a significant amount of licensing content as they don't need to rely on them. Because of their long history in linear television, they have amassed a substantial number of successful shows such as NBC's The Office, Parks & Recs, or CBS's Star Trek franchise throughout the years. These two broadcast veterans turned streamers are generally the ones licensing to bigger traditional streamers such as Hulu, Netflix, and Amazon Prime. Though it may put them at a competitive disadvantage in the streaming wars, a substantial part of their quarterly revenue is dependant on licensing IPs to the larger streamers.
Netflix and Amazon Prime Video are neck-on-neck when it comes to original content but they also invest the most in licensing because their strategy is to become your television. They want to focus on a substantial aggressive catalog because they are interested in hyper subscriber growth and global reach. Thus, they want to have enough content to satisfy every type of viewer.
Prime Video’s Strategy is to license a substantial amount of TV content for its international market; of the 2021 titles inspected, nearly 15% of them involve properties licensed for emerging markets. Latin America and India are among the fastest-growing markets for Amazon Prime Video globally. They invest in bringing more content and expanding the service to a larger audience in these countries.
"We've been in the country for the last four years and growing very steadily. Prime Video is watched in over 4,300 cities and towns in the country, and India is amongst the fastest-growing markets for Prime and APV." - Prime Video India GM Gaurav Gandhi
Surprisingly, Amazon Prime is the second leader in original programming. They partner with other studios like Paramount to create some of their originals, such as Jack Ryan, though they also leverage their own Amazon studios to churn content and deliver it to customers for free. It's important to note that while Netflix leads ahead, their TV shows tend to have shorter runs with an avg of 3.5 seasons, while Prime focuses on long-run seasons as their original shows usually last for 5 seasons. This means though they have fewer titles than Netflix, they have more episodes, thus more content on their platforms.
Apple TV+ is the only platform that doesn't license but focuses exclusively on their Apple original. As far as we've seen, all content on Apple TV Plus is original. You won't find a BBC broadcast, classic series, or existing series Apple has bought a license for – though content like that will be available in the wider Apple TV app. Historically, having an original-exclusive plan is risky. Other streamers like Netflix have admitted their original content hasn't driven the growth it hoped. That hasn't put Apple off pursuing the same strategy. The flip-side of investing in quality original content is that the budget increases at a much higher rate than it is to spend on original content. Apple TV+ outspent other streamers for original content in 2019 – in some cases, they spent a reported $25 million per episode for some of their flagship TV shows. With higher costs for original content and little subscriber growth, streamers have to ask themselves how sustainable that strategy will fare in the future.
Apple TV+ is the streaming only platform that spend the most on original content in 2019
Disney+, despite its massive success in it, did not have a vast TV catalog when compared to other players. In fact, they are more focusing on driving retention and returning consumers with Event watching. Disney+ is mainly targeted at kids and family, which according to studies, kid viewers have a higher rate of repeat viewing versus adult viewers. When it comes to TV. Kid viewership doesn’t rely as much on the novelty of net new TV content which explains why Disney isn’t feeling huge pressure to produce content at Netflix’s pace. Given that they have not positioned themselves as a destination for adults, in order to retain an older demo, they focus on specific critical properties with a high affinity for co-viewing with the family, such as The Mandalorian and Wandavision.
Using Parent Company Content to get an edge
If we look beyond licensed and original, what happens when streamers leverage TV shows from their parent companies? This has benefited them because not only does this expand their catalogs, it differentiates them in the market as these parent content tend to be content that can only be watched exclusively on their platforms. If prospects might not be as interested in the original content the platforms have to offer, they might be interested in watching content from parent companies with which they are familiar.
So far, Paramount+, Peacock, and Disney+ are most over-reliant to their parent company for their own content library, with 87% of Paramount+ being from their parent, Peacock 91%, while Hulu is 12% reliant.
For instance, Paramount+ has gained user traffic and has been able to sign up subscribers by having access to the entirety of the content produced and developed by CBS, which includes Nickelodeon, MTV, PopTV & BET. HBO Max’s market its platform by showing they have content belonging to Warner Media which also owns Cartoon Network, CW, & DC universe.
Peacock benefits from its parent company’s brand awareness, in fact, 92% of their library is composed of NBC content. Both Disney+ and Hulu benefit from the gigantic content from Disney (ABC, Freeform, Disney, FX) whose TV shows are successful on linear television and critically acclaimed.
What can we Expect For The Near Future?
As of 2021, when we account for projects that aired or have been confirmed to air this year, we see that Netflix continues to be the most aggressive streamer adding nearly as much original content as licensed. For the first time, almost 50% of Netflix’s TV catalog will be composed of original shows.
HBO Max is set out to outspend Hulu content expenditure, but they also have more content orders than Hulu, which is important to note because these two platforms are the most alike in terms of content but also in terms of core target demo.
Paramount+ is lagging behind Peacock, with them focusing content as well. Though CBS has a vast catalog, their new streamer Paramount+ launched this year with only four months into the year sleuthing content which may explain why they lag behind.
Lastly, Apple's status as a tech giant means heavy spending on original programming may be more sustainable than it appears. This will lead to its main downside: its content library will remain small and, though Apple is pushing for quality, consumers will be the ultimate judges.
Disclosure: Sarah-Mikal Dalusma is currently employed at ViacomCBS, the parent company that owns two streaming services listed in this articles: CBS All Access, and Paramount+