If original content is the coin of the realm in terms of streaming success, local original content is the true jewels that separate the chaff from the wheat. Nowhere is that more clear than in the international market being mined by Netflix for its next 50 million subscribers – and in its plans to spend more in 2019 than the $1 billion it’s on track to spend on new content with European roots in 2018.
The Financial Times reported that the streamer plans to produce or co-produce 221 projects in Europe next year – up from the 141 it’s put together this year. In addition to increasing its European content availability nearly 57%, the number of originals of European origin it will produce will increase nearly 89% to 153, up from 81 this year.
In addition to giving audiences the local, original content they crave online, those assets will go a long way toward satisfying pending laws from the European Parliament requiring 30% of streaming services’ libraries to be content of European origin.
While that new regulation was designed to make sure that Europe’s content industry remains healthy in the face of the onslaught of new content from Netflix, Amazon and other U.S. companies, it may have an unintentional impact – increasing the competition between those U.S. streamers and in-country broadcasters. Streaming from Netflix, Amazon, HBO and the like often has been a complimentary play in many markets, adding additional content to viewers’ traditional current consumption. While there’s little doubt European broadcasters have felt the impact of audience migration to online services, it hasn’t been at the pace or extent U.S. cable companies have seen (Younger viewers ditch traditional TV; pay TV drops 1.2M subs) – yet. But, the U.K., for example, has seen an increase in cord cutting as well as in the number of young adults who have never had a cable or satellite subscription.
And, it’s not just content delivery players who are feeling the pinch. Broadcasters in the United States have seen continued erosion of their sub-50-year-old audiences, struggling to stem the tide of viewers moving to all-streaming all the time. While still a huge block, network audiences have seen a 10% decline in the new fall season. Imagining that European broadcasters will face the same challenge isn’t very difficult.
With the increase of original content Netflix is planning “10 to 12 (shows) in each country” and possibly more in some markets, up from the current handful, Netflix takes a major step toward becoming the “global Internet TV network” that CEO Reed Hastings promised during his keynote presentation at CES 2016.
“Tune-in has been replaced by personal choice,” he said then. “We live in an on-demand world, and there’s no going back.”
There’s no question that broadcasters in Europe will be pressured by Netflix’s continued content expansion, and they need to push back or lose viewers. But content budgets, obviously, aren’t infinite, and a one-to-one matchup with Netflix, even on a local scale, would be an expensive battle.
That’s why it’s critical that broadcasters look to maximize the value of their content by increasing its speed to market – and market – because as one content exec said, content doesn’t make any money while it’s in production.