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The race for TV content

07092017 TV

The race for TV content

Have you noticed how the quality of TV content has changed over the last decade? Game of Thrones, Homeland, Ozark, Breaking Bad, House of Cards. These shows are recent examples of high-value writing, casting and production which have sparked the age of “binge-watching”. Others are calling it “peak TV”.

And now the race is on.  Consumers will always flock to the next big hit – so media companies need to keep producing to drive viewing membership. And big dollars are being thrown at producers to deliver high-quality content.

As shown below in a helpful chart compiled by The Information, Disney and NBC Universal are spending around US$12 billion annually on TV programming. Meanwhile, Netflix, Time Warner (which owns HBO) and CBS (which owns Showtime) are spending around half this amount.

Screen Shot 2017-09-06 at 11.52.18 AM

And established media companies are not the only players vying for content ownership. Amazon is believed to be spending around US$5 billion annually on TV content creation which it will make free for Amazon Prime subscribers. Meanwhile, Apple and Facebook are both planning on dipping their toe in the content-creating water.

This is all great news for TV-loving consumers. But this is really bad news for traditional free-to-air television networks that have historically acquired third-party content to distribute. At a time when content costs are rapidly inflating, the advertising dollars associated with traditional TV are waning. And without access to the high-quality content, viewership will decline more rapidly, which will only exacerbate the decline in advertising spend on this platform.


Andrew Macken is the Chief Investment Officer of the Montaka funds and the Montgomery Global funds. He established MGIM in 2015 in partnership with Montgomery.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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  1. Nice succinct report on the dire state of free-to-air in the new world where content is king.

    Chris, you’re truly missing out on some quality experiences that, while not dripping with the non-fiction elements of the History/Military/Nat Geographic channels, more than make-up for it in drama, comedy, thrills, suspense and enriching human experiences.

    Here’s a few samplers:
    – GOT: It’s fantasy, yes, but rich characters, long story arcs, movie-quality effects/scenes and compelling dialogue, make it a no-brainer.
    – Boardwalk Empire: set in Atlantic City in the 30s (History?), a great tale of bootlegging and double-crossing mixed in with historical (Al Capone) elements.
    – Narcos: essentially an extended documentary about Columbian narcotics and the cunning Pablo Escobar, told from the perspective of DEA/CIA agents.
    – Fargo: 3 seasons and movie by the Coen brothers, each different yet the same. Bloody, funny, gripping, set in cold Minnesota with outstanding casting, characters and tension.
    – Arrested Development: oldie but a goodie. Great emotive comedy + powerful acting = repeat-friendly. Think The Office (UK), Extras.
    – Archer: (animated). Focused around a special agent (think James Bondesque). Raw, witty, at times tastefully vulgar. Wonderful characters and dialogue. Reinvents itself impressively each season. Wonderfully detailed animation.
    – Better Call Saul: Spin-off prequel of Breaking Bad. Emotive, focusing on family struggles (between adult brothers), legal and career struggles, and Jimmy’s heart and head trying to walk a straight and narrow line while being enticed to the other side of the law by his creativity and connections.
    – Breaking Bad: the original blockbuster TV show. Walter White; quite simply amazing.
    – House of Cards: What happens when you put Kevin Spacey + great writing into a TV Show presidential genre. The “other side” of niceness on display in the West Wing
    – Master of None: quirky comedy where each episode delves into distinct themes as you follow Dev on his way. Not a sitcom, not vapid; raw.
    – Rick and Morty: (animated). Brainchild of Dan Harmon (creator of Community). Comedy, witty, amazing depth to characters. Think Futurama + Back to the Future (“Doc and Marty”) + character development. 3 seasons young and going strong. Takes a few episodes to “get it”.
    – Stranger Things: powerful drama set in Monterey CA with a few big names (Nicole Kidman, Reese Witherspoon, Laura Dern) exploring themes of domestic violence, community integration and relationships generally.

    It’s not that fact-based docos don’t have place; rather, terrible vapid shows of the like you suggest have no place in the new order where they come up against quality shows like those mentioned above.
    Which is why free-to-air will suffer in the event they can only distribute poorer 3rd party content rather than rich vertically integrated masterpieces.
    Which is the point Andrew got across.

    • Thanks GB – sincerely, very much appreciated. You have not only enlightened me as to what there is, but solved my other problem too and probably one that Lisa Fedorenko of the Montgomery team would understand, that of “The Paradox of Choice” or “Overchoice”.

      It’s where there’s so many options (i.e. so much ‘stuff’ out there to watch, or in investment terms, too many things to buy) that the end result is capitulation (and the person ends up choosing nothing, or conversely with investments, buying nothing) because I lose track of the difference between all of them, but you have helped me understand “what’s what”….thanks !

  2. “big dollars are being thrown at producers to deliver high-quality content.”; but Andrew, the problem with a lot of TV today (and although this may be very subjective), is that a lot of it is absolute rubbish !

    I am not some old fuddy-duddy, I’m a Gen-X and a lot of the content out there just ‘doesn’t do it for me’, regardless of the fact that with a young family and long hours at work, I’ve got very little time to sit down and watch anything at all. For that reason, I don’t have Foxtel, Netflix, Stan, Fetch or anything else, even though I could. I’ve never watched ‘GoT’ and don’t plan to any time soon either.

    Maybe I’m an outlier, but I’d sooner have things like “The History Channel”, “National Geographic” and “The Military Channel” where I learn something, than some of the ‘same-same’ vapid reality TV (Jersey Shore, TOWIE, Real Housewives).

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