The top eight U.S. media groups expect to spend at least $115 billion on new movies and TV shows in 2022 to attract new customers for the video streaming business, Financial Times reports.
- Morgan Stanley sees The Walt Disney Co’s (NYSE:DIS) investment in streaming content growing by 35%-40% in 2022.
- Disney’s spending on all new movies and TV shows will likely reach $23 billion, though the number rises to $33 billion, including sports rights, up 32% from its total content spending in 2021 and 65% from 2020.
- Netflix Inc (NASDAQ:NFLX) looks to spend over $17 billion on content in 2022, up 25% from 2021 and 57% from 2020. Netflix aims to break even and become free cash flow positive in 2022.
- “There is no turning back,” said media analyst Michael Nathanson of MoffettNathanson. “The only way to compete is spending more and more money on premium content.”
- In the past few quarters, subscription growth has slowed for Netflix, Disney’s Disney Plus streaming service, and others.
- Costs have been rising as the biggest entertainment and technology companies rush to produce more shows to feed their streaming services.
- Finding locations to film in Los Angeles has become difficult.
- Price Action: DIS shares traded higher by 0.36% at $155.76 in the premarket session on the last check Wednesday.
