Streaming Services Are Cutting Back On New Shows Just When They Need Them the Most

Streaming services are slowing their content spending in 2023 after a decade of breakneck growth. But will fewer shows mean fewer subscribers?

Streaming platform buttons appear on a remote.
Some streaming platforms are reeling in their spending. NurPhoto via Getty Images

After a decade of breakneck growth and costly investments, streaming services will slow their spending on new shows in 2023, according to a report by Ampere Analysis, a London-based research firm. Content spending will increase by 2 percent this year, compared to 6 percent growth in 2022, representing the lowest growth rate in more than a decade, excluding the pandemic-related slide in 2020. The deceleration can be attributed to the economic downturn, the report said.

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Netflix (NFLX) isn’t renewing a handful of new original series in 2023, including Partner Track, a legal drama; Space Force, a workplace comedy with Steve Carell; First Kill, a queer vampire drama; and The Imperfects, a supernatural, coming-of-age series, among others. While there are many reasons Netflix cancels shows, low viewership is a common thread. HBO Max removed a slew of its original content in August, most of which were animated shows. And despite its dystopian science fiction series Westworld winning nine Emmys and leaving viewers on a cliffhanger, Warner Bros. Discovery (WBD) confirmed its cancelation and removal from HBO Max after viewership sank.

Streaming services are in a tough spot. They need subscribers to make money and content to attract those subscribers, so paring back their shows risks stemming subscription growth. Most platforms aren’t turning a profit, which means they are pulling from other segments of their businesses to support their streaming services or turning to lower-priced ad-supported tiers to gain subscribers and revenue. With more than 200 unique streaming platforms, and around 10 major ones, industry observers say the market could be nearing a bubble pop.

The natural outcome of an over-saturated market is consolidation, and “the players are starting to eye each other up,” said Adam Armbruster, partner at Eckstein, Summers, Armbruster & Company, a media sales consultancy. The services that produce original content have the best chance of being among the players that survive, he said. 

2023 will be a “tipping point year” where spending will reach unsustainable levels for some companies, leading them to either give up or consolidate, Morgan Stanley analysts said in a note to clients.

Subscription-based streaming services like HBO Max, Disney+ and Netflix will increase spending at a rate of 8 percent, compared to 25 percent in 2022, according to Ampere. Paramount (PARA), Warner Bros. Discovery, Disney and Comcast, which owns Peacock, don’t expect their streaming services to profit until at least 2024, meaning 2023 will be another year of losses.

With slowed overall spending, consumers can expect streamers to make smarter choices on what projects they’ll get behind. This means utilizing user data to determine what audiences will watch and investing in shows with existing fan bases, Armbruster said.

Streaming Services Are Cutting Back On New Shows Just When They Need Them the Most