With Subscriber Growth Slowing, Media Groups Spend $115B on Streaming Content

The top eight U.S. media groups will spend at least $115 billion on new content — even as video streaming loses them money, Financial Times (FT) reported Tuesday (Dec. 28).

While there are concerns that it might become more difficult to get new customers in 2022 after the massive growth of the last few years of the pandemic, companies also don’t want to miss out on the action. Michael Nathanson, a media analyst, said there’s “no turning back” and that the main way forward would consist of more money spent on content.

Per the report, most of the listed companies, including Walt Disney, Comcast, WarnerMedia and Amazon, will see losses on streaming units, with aggregate spending hitting around $140 billion, including sports.

FT writes that Disney’s streaming investments will likely grow 35-40% in 2022, with spending on new movies and TV hitting $23 billion. That will include a new version of “Pinocchio,” another “Cars” sequel and more Star Wars content.

John Sloss, a partner with the law firm Sloss Eckhouse Dasti Haynes, said it was “mindboggling” how much money was being spent by various companies on streaming content.

That said, subscriber growth has been lagging for Netflix, Disney and others. Netflix has said this can be chalked up to COVID-related production delays making for less new content, which has been an issue for most of the industry.

Netflix is set to spend over $17 billion on content next year, a 25% increase from this year. The company says it thinks it will break even and be free cash flow positive next year.

PYMNTS reported that as consumers are looking to save money, they have also been looking closer at the amount of subscriptions they keep on their bank accounts — especially given the range of options currently available.

Read more: The Role of Flexible Refunds in Driving Subscriber Growth

The pandemic restrictions begun to be taken away earlier in 2021. Even so, 84% of U.S consumers said they were still engaging more often with online entertainment rather than going out for activities.

That same percentage subscribe to at least one of the video streaming service, and the average household is subscribed to at least four of them.

Millennials and Gen Z customers are most susceptible to ad-supported services which are cheaper, looking for ways to save money through those, bundles and discounts.