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TV Production Spending: The Major Studios Win . . . for Now

June 5th, 2019   ||    by Todd Wasserman

Netflix had a banner year in 2018, spending $1.8 billion on advertising to promote its original programming, according to MediaPost.

However, it will likely remain behind the top networks in terms of TV production spending. Mental Floss reported that Disney has earmarked $100 million for the first season of Jon Favreau’s live-action Star Wars show. Game of Thrones, meanwhile, commands an average $15 million per episode.

The unprecedented levels of spending augur changing times for the TV industry. For most of its history, TV producers had a monopoly on distribution. But now, thanks to the internet, advertisers don’t need to buy network time to get their messages across. By all signs, Netflix is the biggest change agent but likely will be joined by others soon.

For the moment, though, consumer preferences are keeping a lid on the growth of show producers that aren’t one of the four major TV networks, but it’s unclear how long that will be the case.

Last Year’s Spending

Though what each network spends on content is often a guarded secret, an analysis by MoffettNathanson Research posited that NBCUniversal was the top spender on TV production and programming last year. The network spent $11.4 billion, according to MediaPost. That includes $7.8 billion for TV content and $3.6 billion for film.

  • Walt Disney was second at $9.4 billion ($5.8 billion for TV production spending and $3.6 billion for film).
  • Time Warner came in at third place with $8.7 billion ($5.5 billion for TV and $3.2 billion for film).
  • 21st Century Fox tied for third with almost $8.7 billion ($6.1 billion for TV and $2.6 billion for film).

Even though Netflix came in fourth place with $7.9 billion in TV and film production spending, it was not far behind the four major networks, an indicator of Netflix’s increasing spending power and standing in the industry.

What Does the Future Hold?

Netflix may be the biggest obstacle to TV execs’ dreams of securing the future, but that’s just the beginning. Shonda Rhimes and Ryan Murphy now have left broadcast to develop shows for Netflix. One worry is that Netflix is just the tip of the iceberg since Disney and WarnerMedia are preparing to launch their own platforms.

However, Netflix was sanguine about its competition: in a fourth-quarter letter to shareholders, Netflix claimed that Epic Games’ Fortnite was stealing viewers and that YouTube was another potential foe.

Netflix may be the cool new kid on the block, but it still has much to prove in terms of lasting power in the face of the major studios—and with competitor streaming services just around the corner.

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