The entertainment industry will spend more money than ever on content production in 2020 despite the COVID-19 shutdowns in the spring and summer. The production surge is led by digital-streaming services, and nobody is spending more on new content than Netflix (NASDAQ: NFLX). That’s the big takeaway from an Ampere Analysis research report commissioned by the Financial Times.
Image source: Getty Images.
Media production estimates by the numbers
Ampere’s report estimates that Netflix will spend roughly $13.6 billion on production and licensing of films and serial shows this year, a $3 billion increase from 2019. ViacomCBS (NASDAQ: VIAC) should land in second place with a $13.5 billion budget, followed by Walt Disney (NYSE: DIS) at $11 billion, and Comcast (NASDAQ: CMCSA) subsidiary NBCUniversal at $9.5 billion. These figures exclude licenses to cover sporting events.
However, most of this spending is going toward media licenses rather than outright production projects. Even Netflix is funneling most of its content budget into licensing, having earmarked just $4.4 billion for shooting original content.
The pandemic is not expected to cut into the planned release schedule for video-streaming services in 2020, given the long lead times for premium TV shows and movies, but next year’s crop should turn out a bit thinner than usual. Furthermore, the spending spree is not universal on a global level. Ampere sees production budgets dropping lower in Europe, where a lack of advertiser interest is making it difficult to find funding for ambitious media productions.
All told, the analyst firm expects the media industry’s production spending to land near $206 billion in 2020. This figure includes sporting events and the budgets of many smaller studios.
10 stocks we like better than Netflix
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Netflix wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of August 1, 2020
Anders Bylund owns shares of Netflix and Walt Disney. The Motley Fool owns shares of and recommends Netflix and Walt Disney. The Motley Fool recommends Comcast and recommends the following options: long January 2021 $60 calls on Walt Disney and short October 2020 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.