Is peak TV really over? Last year, U.S. show releases edged down, breaking 13 years straight of continuous growth.
Yet a study presented at Sweden’s Göteborg Festival on Wednesday suggested that global production, particularly of scripted, is primed for a new surge, once COVID-19 wanes. That’s driven by the extraordinary revolution in market dynamics powered by a new order of global direct-to-consumer studio streamers. Following, that and other takeaways from the presentation, TV Drama: Looking Beyond a Year of Change, presented at Göteborg’s TV Drama Vision by Ampere Analysis’ Guy Bisson:
2020: The End of a 100-Year Business Model
2020 accelerated a “fundamental change in the production-distribution value chain, a change to a 100-year-old business model which saw studios make content, and sell a lot of that out into the international market place. Now, as they’ve gone global and direct, they are increasingly retaining rights for their own platforms and so the tap of product going into international distribution is slowing,” Bisson said. The consequences of that seismic pivot play out throughout the industry.
The Name of the Game: Original Production
Studio hold backs have dented the supply side. Major studio content in the Netflix catalog, for instance, dropped 1,946 hours between August 2019 and August 2020, Bisson said. One game-changing result: “Original production for everybody becomes more valuable. That’s why we see, particularly towards the very end of last year, a big recovery in commissioning activity in scripted content. It’s not just driven by Netflix and Amazon but a huge number of new financially backed streaming platforms like Disney Plus, Paramount Plus, Peacock, HBO Max etc. which are going or will go global and they all need content. We’re in the middle of a boom not a bubble,” Bisson said in a Göteborg Q&A. He told Variety that he would dispute recent headlines about the end of peak TV. “That’s entirely a COVID-19 effect and we’re already seeing signs of that reversing.” Scripted commissioning soared 73% among streamers in fourth quarter 2020 vs. same quarter a year earlier, Bisson noted.
How Coincidence Supercharged Change
2020 saw two totally disparate factors turbo charge a revolution in film-TV business models: COVID-19 and Hollywood studios’ realization that the revenue power balance had shifted from home entertainment and theatrical to a large TV window led by streaming. One collateral was that “during a pandemic, diversification of source pays dividends,” said Bisson. Netflix is plunging ever more original production in international markets, given their greater growth potential. Production outside the U.S. in multiple territories also spreads the risk of shoot shutdowns in single countries. 62% of Netflix’s current originals are made in the U.S., but 62% of its upcoming new originals are made outside the U.S., led in number of titles by the U.K. followed by Japan, Spain, Canada, South Korea, Turkey, Brazil, India, Germany and Mexico.
Scripted Rules
Of the 803 shows in development or production at the streamer studios, 80% are scripted, Ampere Analysis calculates. Of original productions, nearly two in every three fall into the top three genres: Sci-fi and fantasy (20%), comedy (19%) and crime & thrillers (16%). Streamers commissions are not only more international but gaining in breadth of subject and inspiration, and tackling ever more both diversity and race.
The Name of the Game (2): Leveraging Comic Books, Mangas, Podcasts & Computer Game Franchises
As everyone plunges into original production, given studios’ holdback of rights, competition has increasingly intensified. That “elevates the value for intellectual property based around characters, franchisable content that can be kind of self-perpetuating,” Bisson commented. Books, magazine articles or existing movies accounted for 66% of adaptations in the fourth quarter of 2020. But the source of inspiration is changing, given that streamers skew younger. 24% in last quarter 2018, comics, mangas, podcasts, stage shows and games represented 34% of adaptations two years later.