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Increasing Cost Consciousness: An Industry Snapshot

Our conversation starts with a look at how the industry changed over the course of the pandemic and where we might be heading in 2023.

February 15, 2023

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Our Senior Director of Innovation, Michael Kammes, recently sat down with our VP of Strategy, Eric Wynalek, our CFO, Gabe Camera and  President at First Option Capital, Brandon Ebrahim, to discuss how companies are working to maximize efficiency while decreasing costs in the face of economic uncertainty.

What has happened as far as production days?



The industry started seeing some pressure in Q2 and Q3 last year, and we began seeing cutbacks in production in Q4. 


TV saw a stark drop last year, but a positive 5-year average demonstrates that a lot of content is still being produced. 

  • Q4 2022 vs. Q4 2021: -24.2%
  • YTD 5-year average: +7.3%
Feature films 
Not as drastic of a drop, but we have to factor in that there are fewer films than television shows produced overall. 
  • Q4 2022 vs. Q4 2021: -16.2% 
  • YTD 5-year average: -24%
Commercial production
Commercial production saw the most significant drop. 
  • Q4 2022 vs. Q4 2021: -33.7% 
  • YTD 5-year average: -24.5%

This category includes stills, student films, documentary short films and music videos. 

  • Q4 2022 vs. Q4 2021: -9.4% 
  • YTD 5-year average: -1.6%

Show orders and Staff Reduction


While we don't want to gloss over these sobering facts, it's important to note that they're not a death knell for the industry but rather another pressure point when considering how you're deploying budget. 

  • Q4 2022 vs. Q4 2021: -24% drop in adult scripted series of orders. 
    • Unscripted didn't see the same drastic drop but is also cheaper to produce and therefore under less pressure when considering spend. 
  • Media industry jobs cut in 2022: 3,800. 
    • This includes film, television and news. 

The Gaming Industry


The gaming industry saw a similar contraction last year. Looking at each section, you can see that downloaded and boxed PC games grew by 1.8%, but the broader industry dropped.

  • Q4 2022 vs. Q4 2021: -4.3% 

Regression to the Mean


While this information does not illustrate a rosy picture, it's important to note that 2021 was an anomaly. We see 2022 as a corrective year following the market's two years of lockdown-fueled growth, and while the numbers aren't great, the projections and views in the industry are not as dire as we may think. Some recent wins illustrate this fact. 

Sundance deals:
  • Netflix purchased Fair Play for $20 million
  • Apple purchased Florence Sun for $25 million
  • WME Independent had an $8-million deal this year and a $25-million deal last year using one of our products, Screeners.com
Gaming win:
  • Activision beat Q4 estimates

The main takeaway is that the changes we're seeing are a regression to the mean. The industry is being reconfigured in a way that actually matches spend and consumption. But commerce is still happening, and global content expenditure is projected to increase by 2% over the next year. 

In our next installment, we'll discuss how companies are getting more out of less. Don't want to wait? Watch the entire webinar now. 

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