Netflix and Amazon returned to dominance in original content commissioning worldwide in the first quarter of this year, according to research and consulting firm Ampere Analysis.
The pair had been challenged in recent years by the launch of studio-backed streaming platforms, but studio players have been downsized as a result of Hollywood strikes, rising costs and pressure from Wall Street to prove they can grow profitably.
Ampere said Netflix ordered the most new titles since the third quarter of 2021 and that Amazon set a new record for quarterly commissions. The two streaming giants accounted for more than half (53%) of broadcasters’ commissions worldwide from January to March 2024.
The report also indicated that Netflix and Amazon now order “the majority of their titles from outside the US”, as a result of the saturation of the US market and in line with their strategy to address local markets through local content. And the research firm predicted that this trend will continue.
Netflix’s commission growth was focused on Western European and Asia-Pacific titles, in particular. “In the first quarter of 2024, Netflix’s Western European commissions almost reached parity with North American titles for the first time,” Ampere said. “Netflix is ​​seizing the opportunity for international growth by focusing on proven portable content market providers such as Spain, India and South Korea.”
Cost-effective unscripted content featured heavily in the platform’s Western European commissions, with documentaries accounting for 30% of regional orders, up from 23% last year.
In Asia, Thailand experienced the largest individual growth with nine titles ordered in the first quarter of 2024. Crime and thriller content was a focus in India, which Ampere predicts will become Netflix’s largest subscriber base. in the region.
In terms of subscriber numbers, Netflix trails several Indian streaming players, but its price tag is higher. And Ampere says it’s looking to compete more closely with Amazon in the country.
“Netflix is ​​increasingly relying on ‘pay-one’ deals with theatrical studios to supply it with new, exclusive American films and has reduced its order of originals. [U.S.] movies. In contrast, it has increased its international film orders in territories such as the Nordics, Asia Pacific and Sub-Saharan Africa,” said Ampere.
Amazon is focusing on India, in particular. In the first quarter of 2024, Amazon ordered a record 37 titles in India.
“Global broadcasters, including Amazon, have previously struggled to compete with local players offering strong regional content. However, this total signals Amazon’s intent to take over existing platforms, cementing India as a cornerstone of its international strategy,” Ampere said.
Amazon also announced its largest slate of Indian originals to date and is actively pursuing pay-per-view and co-financing deals with [Indian] theatrical distributor. Amazon’s original order of movies, in general, has increased since it acquired the MGM studio two years ago. The numbers surpassed Netflix for the first time in the second quarter of 2023.
Germany, where Amazon leads Netflix in terms of domestic subscribers, was the biggest winner in Western European commissions, with 13 content orders in the first quarter of 2024.
“Market saturation in North America, the rising cost of production and the ongoing impact of Hollywood strikes have prompted Netflix and Amazon to increase investment in international productions to stimulate subscriber growth. While some studio-backed SVoDs have made cuts internationally, these two streaming giants are doubling down on their localized global strategy,” said Mariana Enriquez Denton Bustinza, senior researcher at Ampere.
But she also tried to distinguish between their strategies. “For Netflix, this means catering to a broad subscriber base by tapping into markets whose productions offer the greatest potential for crossover appeal. Amazon’s approach remains more targeted towards key markets such as India, while leveraging its global position to expand further into the theater market to generate downstream revenue from its platforms.”
Not mentioned in Ampere’s report: Amazon also claims mutual benefits from online entertainment and home shopping, or a “flywheel effect,” in those markets where it operates shopping membership plans.