Disney/Fox, Comcast/Sky to spend US$43BN on content in 2018 | Media Analysis | Business
By continuing to use this site you consent to the use of cookies on your device as described in our privacy policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. [Close]
For once the concept of mega-merger seems rather an understatement after analysis from Ampere suggested that post completions of Comcast/Sky and Disney/Fox will see two in every 10 dollars spent on content worldwide now be spent by these two entities.

ampere mega 10Dec2018This represents a global combined total of US$43BN by the end of 2018 with Disney/ Fox will spending US$22 billion on originated and acquired content, and Comcast/Sky US21 billion. In the US the two media behemoths’ total is likely to be two-fifths of the total content spend. The total says Ampere is more than the combined outlay of the next ten largest content spenders in the US - including OTT platforms Netflix and Amazon.

Ampere believes that wielding such financial authority not only strengthens both entities’ positions in the global market, it protects against the rising strength of online video. It notes that each of the two entities controls an increasingly vast library of original content ready to be exploited through direct-to-consumer offers. Disney has already indicated it will stop licencing content to Netflix in favour of its own direct to consumer offer, a service which will have even greater appeal with the addition of Fox assets.

“To some extent, the increasing level of consolidation is a reaction to the growing power of online video platforms,” said Ampere Analysis analyst Daniel Gadher. “Companies such as Netflix and Amazon continue to invest significantly in content, a trend which shows no signs of abating. We expect Netflix to spend over US$8 billion on a P&L basis by the end of 2018, and the streaming giant has repeatedly stated it will continue to boost its content budget. Prior to the recent mergers, Netflix was on course to catch - and overtake - the top Hollywood studios by content spend. However, in light of the two new combined entities, Netflix would now need to triple spend to achieve this this feat.”

One possible implication of this consolidation is the effect on independent producers. Gadher cautioned that with a shrinking number of content acquirers in the market, the competition for rights will diminish, and this will inevitably impact the indie sector’s ability to negotiate favourable deals.”