How much money each company spends on content

Yahoo Finance’s Allie Canal joins the Live show to compare the budgets for the various hit series all of the streaming platforms put out.

Video Transcript

SEANA SMITH: Let’s switch gears here, talk about another company that’s a favorite here amongst investors. It’s Netflix. And they are on a spending spree. We’ve known that for quite some time that they are willing to pay up for content. But the amount that they’re paying per episode for some hit shows, it might shock you.

Senior entertainment reporter Alexandra Canal is digging into the numbers for us. And Ali, was reading ten of millions of dollars per an episode of some of these hits. Do I have that right?

ALEXANDRA CANAL: Yeah, you do, Seana. It’s quite crazy. We know that Netflix spends roughly $17 billion annually on content. But as we’re saying, some of these numbers are out of this world. According to “The Wall Street Journal,” the upcoming season of “Stranger Things,” which will debut later this month in two installments, cost a whopping 30 million per episode.

And that made me get a little bit curious when it comes to some of the most expensive TV productions out there. And spoiler alert, it’s not just Netflix that’s spending a whole lot of cash.

So let’s start with “Friends,” this is one of the earliest shows to really double down on a big budget, mostly due to the cast and their demands to be paid equally. By the final seasons, all six members of the main cast for each raking in $1 million per episode, thus contributing to that sky-high production cost of $10 million for NBC.

And you can see that NBC dealt with a very similar situation with “ER,” given George Clooney and keeping him on board. And then of course, we have Disney’s “The Mandalorian,” “Game of Thrones,” “The Crown,” all those shows with a double-digit production cost.

But let’s get to the high rollers here, one of those being “The Morning Show.” We have big, A-list stars, Reese Witherspoon, Jen Aniston, Steve Carell. Apple TV+ throwing 15 million per episode for this series.

But let’s take a look at the upcoming “Lord of the Rings” that will debut on Amazon Prime Video. If you thought the final season of “Stranger Things” at $30k per EP was a lot, this blows it out of the water. According to “Variety,” Amazon is spending $465 million to produce the first season of this show. That means each episode is slightly above $58 million in total costs.

It’s just absolutely insane. But these are what the price is right now for content.

RACHELLE AKUFFO: And I will watch “Rings of Power,” every single minute. So at least they get a little bit of money out of me, I suppose. But then how exactly have these types of shows really helped fuel the surge in content spending that we’ve seen in recent years? And in terms of the expectations for 2022, are they even higher?

ALEXANDRA CANAL: Expectations are super high. It’s more CGI, more A-list stars, more premium content. That’s really what consumers have become accustomed to. And that’s been fueled by streaming.

According to Compare Analysis, streamers content helped spend grow 14% year over year in 2021, resulting in more than $220 billion spent. For ’22, that firm expects the number to be even higher, with content investment exceeding $230 billion, again primarily driven by subscription streaming services.

Of course, there are a lot of hurdles that’s happening when it comes to streaming platforms right now. We have subscription fatigue. We have some churn in the space. Netflix is ​​dealing with a lot of those head-on hurdles. But at the end of the day, content does go a long way. Netflix still has a lot of subscribers worldwide, well over 200 million.

And we’re seeing a lot of these other players now spending as much as they are in terms of keeping up with some of that content. And if you’re a player that can’t, that’s when I think we’ll see more consolidation and M&A in this space overall.

So Dave, I don’t know if you’re planning to watch “Stranger Things,” but if you do, just know you’re watching a heck of a lot of money per episode.

DAVE BRIGGS: I’ve never seen an episode, not one.

SEANA SMITH: Me neither.


SEANA SMITH: We’re in the minority though.

DAVE BRIGGS: OK Ali, thank you.

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