New research on upcoming commissions by Ampere Analysis reveals that Netflix and Amazon are ramping up co-productions with local broadcasters in a bid to provide viewers with high-quality content at lower cost. The BBC and Sky are just two of the high profile public broadcasters and pay TV operators who have been unable to resist the lure of working with the FAANG (Facebook, Apple, Amazon, Netflix and Google) group. Ampere Analysis predicts that many more will follow.
With non-USA based subscribers representing the fastest growing parts of their customer bases, Netflix and Amazon are realising that locally relevant (or localised) original content is becoming increasingly important. Collaborating with local players enables the streaming giants to produce internationally relevant 'originals' that complement their existing slates, whilst also reducing funding costs. Netflix’s Spanish language series El Chapo (in association with Univision), Japanese drama Atelier (in association with Fuji Television) and Amazon’s British historical fantasy Britannia (in association with Sky) are examples of this growing trend.
Netflix leads the way with co-production, but Amazon is gaining
Although Amazon lags behind Netflix, its proportion of co-produced 'originals' is set to rocket in the future, with quadruple the number recorded in 2017. Over 12% of Netflix’s 2018 releases and upcoming 'original' shows are co-productions (by Ampere’s estimates), compared to just under 8% of Amazon’s.
Localisation goes hand in hand with co-production deals
Ampere’s data reveals that there is a link between the proportion of co-produced originals and localised originals. 35% of upcoming Netflix and Amazon 'originals' are localised to a non-US market, compared to 15% of upcoming releases globally. Among these localised titles, co-production deals are rife - 29% of all upcoming localised originals are co-productions, by Ampere’s estimates.
Europe is a focus for co-productions
Ampere data also shows a focus on European co-productions. 56% of upcoming Netflix and Amazon originals originating from four key European markets (Denmark, Netherlands, UK, and Spain) are co-productions. These include British series King Lear, in partnership with BBC One, and Netflix’s Spanish language series, and Brigada Costa de Sol, in association with Mediaset Espana and Warner Bros.
Olivia Deane, analyst at Ampere Analysis, said: “Co-productions are seemingly a win-win for streaming giants like Amazon and Netflix, broadcasters, and viewers seeking high quality, local content. Historically, broadcasters were forced to effectively adopt deficit funding models to create their own high-end dramas; co-productions enable them to increase production values whilst eliminating many of the risks associated with creating more expensive content. In return, streaming players maximise local broadcasters’ existing resources and experience while also owning the near-global rights at a highly discounted fee. While some public broadcasters are concerned that co-productions may provide SVoD giants with fuel for brand building, and further broadcast viewing erosion, for viewers it’s a match made in heaven. As co-productions gain more traction and more partnerships enter the fray, we expect to see them occupying an increasing share of catalogues.”
Photo shows: Olivia Deane, analyst at Ampere Analysis.