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Newly released data confirms Netflix (NFLX) is truly the dominant player in the over-the-top streaming industry in the U.S. The competitive landscape suggests it would be difficult for a rival to dethrone the company from its market leadership position.
Nielsen Holdings PLC. (NLSN), a data research firm based in the U.S., specializes in gathering and publishing statistics related to the media industry. Last week, Nielsen published details regarding the most-watched TV shows and movies in America for the week ended April 18, 2021.
Disney+, owned by The Walt Disney Company (DIS), secured the number 1 spot in the original TV series category with the release of The Falcon and The Winter Soldier. Them, an original series available on Amazon (AMZN) Prime Video, was the second most-watched original TV series for the week.
The remaining eight spots were secured by various original shows produced by Netflix, Inc. In the “Acquired TV Series” category, Netflix secured all of the 10 spots among most-watched shows, along with five spots in the “Movies” category as well (including the number 1 position). (See Netflix stock analysis on TipRanks)
Industry-Leading Content Budget
Netflix spent $11.8 billion on producing original content in 2020, but the production of some programs had to be postponed due to the global lockdown in the first half of the year. The company expects to spend $17 billion on content in 2021, which does not come as a surprise considering Netflix’s plans to ramp up content production this year.
Netflix spent only $2.4 billion on original content back in 2013, when the streaming company had only 41 million active subscribers. Since then, content spending has multiplied, as the number of subscribers has skyrocketed to 208 million.
Based on those numbers, it would be reasonable to assume that content spending and subscriber growth are positively correlated. Netflix has more subscribers than any other content streaming service at the moment, and the billions of dollars the company has spent in the past on producing high-quality original content played a massive role in helping the company retain the number 1 spot in the industry for so long.
In 2020, Amazon Prime Video spent $7 billion on original content, while Hulu and Apple TV+ spent $2.5 billion and $6 billion, respectively. It is difficult to estimate how much Disney+ spent on original content, but the number is likely to be substantially lower than the $17.3 billion Netflix spent.
As evidenced by this data, competitors are finding it difficult to keep pace with Netflix when it comes to investments in content. Netflix’s market-leading content budget is likely to help the company dominate the industry in the foreseeable future.