The rapid rise of video streaming services over the past few years is affecting TV networks, pay-tv providers and other industry players in more ways than one. Not only do Netflix, Amazon and other online companies lure viewers away from traditional TV, they also shake up the status quo in the content market. Between 2014 and 2017, prices for distribution rights of independent films
shown at the Sundance Film Festival increased sharply, a development widely attributed to Netflix and Amazon joining the bidding with big pockets. And it’s not just distribution rights that streaming companies are gobbling up: they also sign deals with acclaimed showrunners, screenwriters, actors and directors left and right in an effort to build up their original content libraries.
According to estimates by analyst Michael Nathanson
reported by Recode
, Netflix’s content spending wasn’t far off the amount spent by giant media conglomerates such as Disney, Time Warner and Fox last year. Having spent $6.3 billion on acquired and original content in 2017, Netflix will reportedly up that total to around $8 billion this year in its bid to become less reliant on licensed content and gradually increase the share of its own productions to 50 percent of its library
. In doing so, Netflix hopes to improve its profitability in the long run while also reducing the risk of external content owners raising prices or pulling their movies/shows from Netflix altogether.