Production budgets from major streamers are anticipated to reach $20B in 2018.

Production budgets from major streamers are anticipated to reach $20B in 2018.

The rise of streaming services like Netflix, Amazon Prime, and Hulu has led to many of the most creative projects now being made for the small screen rather than the movie theatre. Viewers seem to want to continue watching characters and plots they enjoy, and this has freed creators from the bounds of a two-hour movie. Binge-watching means that entire seasons are released on one day, freeing creators to a certain extent from the pressure of ratings. This is the new normal. And all this change has happened in the space of a few years - we’ve already almost forgotten that Netflix was a DVD subscription service for many years, with its revolutionary business model leading to the demise of the once ubiquitous Blockbuster. Netflix’s first original series House of Cards debuted in February 2012. It’s first real competitor, Amazon Prime, began producing original TV shows in 2013. In 2018, there’s already a generation that can’t conceive of a world where you can’t stream pretty much anything you want, whenever you want it.

All this original programming costs money – lots of it. Netflix’s content budget in 2017 was $6B and in 2018 it will reach $8B. The major streamers projected total production spending for 2018 is anticipated to be around $20B and is expected to keep rising. Netflix, Amazon, Hulu, etc. have been competing to attract top talent both in front of and behind the camera Recently, Shonda Rhimes (Grey’s Anatomy, Scandal, How to Get Away with Murder) and Ryan Murphy (Glee, American Horror Story) signed output deals with Netflix. Matthew Weiner, the creator of Mad Men, has a new show The Romanoffs debuting on Amazon in October. The eight episodes have a combined production budget of $50M. These projects are like feature film productions but often have a more accelerated schedule and tighter deadlines. Hulu, although later to the game, has produced critically acclaimed shows like The Handmaids Tale.

And it’s not just about episodic television – in the first four months of 2018, Netflix produced as many movies as the six major studios combined! There’s a method to this apparent madness though. According to Ted Sarandos, Chief Content Officer for Netflix, their game plan is “more shows, more watching; more watching, more subscriptions; more subscriptions, more revenue; more revenue, more content” (as told to Josef Adalian of Vulture). As Wall Street is predicting 200M Netflix subscribers by the end of 2020 and 300M by 2028, it isn’t going to stop any time soon. For Amazon, the core goal is converting viewers into Amazon Prime shoppers. Jeff Bezos has been blunt about this, saying at a 2016 technology conference, “When we win a Golden Globe, it helps us sell more shoes.”

What does this mean for production? Well, first of all, there’s more of it, shooting in locations dispersed all over the world. Good Omens (Amazon/BBC), Hard Sun (Hulu/BBC) and Britannia (Amazon/Sky) are just three out of many international co-productions. Secondly, companies like Netflix have upped the technical requirements by mandating 4K acquisition, which means four times the data required for HD production. Camera manufacturers like ARRI have had to accelerate the development of higher resolution cameras in order not to miss out on this demand. And all this image data is accompanied by more and more metadata.

Managing all this data is a challenge but also an opportunity. Despite the increase in data generated at the shoot, the production team and the studio still want to see dailies as soon as possible. Companies like PIX provide secure video collaboration systems for collaborative workflows so that an executive in Los Angeles can get to his or her desk in the morning and see what was shot the previous day wherever in the world the production was located.

Editorial teams don’t have to spend much time preparing executive dailies – they can focus on the creative tasks rather than the more mundane. It’s easy for them with PIX to distribute reels or screeners to the production crew, other collaborators, and the marketing department as their work progresses.  This streamlining content can even begin in pre-production. VFX teams, for example, can share previz materials and then higher resolution files as their work progresses.

Content collaboration systems like PIX streamline production and post-production workflows and make it possible for Netflix, Amazon and the other streaming services to rapidly ramp up their production slates while demanding higher resolution and allowing for no compromise in quality. Also, with studios like Disney launching their own streaming services, the demands for increasing efficiency and saving time in production will continue to increase.

See how PIX can help your next big project. Call or email us at +1 (415) 357-9720 or sales@pixsystem.com to set up a demo and learn more!