Think there isn’t big bucks in syndicated video-on-demand (SVOD) Think again, as Netflix, Hulu Plus and Amazon Prime will definitely be cashing in to get a hold of major programming, according to Variety.
An analysis from David Bank indicates that SVOD services will be spending mega-bucks to secure programming for the next year, to the tune of $6.8 billion. That’s huge news for Hollywood studios, since this year’s numbers are just a bit smaller at $5.2 billion.
This is mainly due to expansion and the need to secure programming that will lure in viewers, both with original productions (like Netflix’s Orange Is the New Black and House of Cards) and popular shows that will run via syndication (like Netflix’s deal to air the first season of Gotham after its network run).
Bank believes that the increase in spending for video-on-demand services will actually go into double digits year over year, meaning even more programming available to viewers across the “big three”, particularly the ever-popular Netflix.
In fact, the amount spent for off-network domestic syndication will see an even bigger number, going into $18.4 billion projected for 2015. However, those will probably lean more towards digital services, as expansion of the current cable channel line-up isn’t expected over the next few years.
Bank believes that video-on-demand spending has already gone beyond general syndication spending by broadcast stations, and should double the $3.3 billion projected for next year very soon. In all, between broadcast, video and cable, studios are expected to be given $29.5 billion by next year.
Spending seems to come the most from Netflix, with an estimated $3.3 billion in spending, with Amazon coming in second with $1.7 billion and Hulu Plus in third with $1.5 billion.
A lot of studios are making big money from the deal, including CBS Studios, leading the charge with $179 million expected for 2015. Warner Bros. is in second place with $106 million, and Lionsgate in third with $61 million.
Even those lower on the list, like Universal TV with its $22 million, are still cleaning up, as the majority of that payoff is coming from one series alone, The Blacklist.
Newcomers are definitely making moves, though, according to Bank. “Yahoo’s purchase of exclusive rights to prior seasons of ‘Saturday Night Live’ and its order for a sixth original season of ‘Community’ could be a harbinger of things to come,” he said.
Exclusive deals could be a huge boon for these companies, but they also come with risk. “This model, on some level, has enabled the major studios to make more of the ‘hit risk’ out of producing premium broadcast content,” Bank explained.
“While much has been made of the potential for original programming to lower demand for acquired off- network programming, we think such concerns are overstated,” wrote Bank. “The average linear cable channel or SVOD platform alike has to program 24 hours per day of viewer demand. This demand cannot be satisfied by a slate of six or so original shows.”
It’ll be interesting to see how the slate looks with exclusive programming over the next year.