OTT subscriptions may be cheap, but production is not

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It is a long-standing belief that TV productions are always cheaper to produce than movies – after all, the two are referred to as the “small” and “big” screens, respectively, not just because of their physical sizes, but their revenue and outreach potential as well.

However, take the last few years, and we see a massive overturn in this idea. Here are some figures for us to chew on:

  • The budget of the 2005 movie Revenge of the Sith was $113 million.
  • The budget of the 2019 Disney+ series The Mandalorian was $120 million for Season 2.
  • The budget of the 2008 movie Iron Man was $140 million.
  • The budget of the 2016 Netflix series The Crown was $130 million for Season 1.

Evidently, as the years have passed, TV productions have reached similar levels of expenditure as movies from yesteryears.

On face value, there could be a dozen reasons that have led to this – general inflation of money; the rise of Visual Effects (VFX) and Computer-generated Imagery (CGI), both of which are expensive; the rise in value of the entertainment industry itself; the disproportionate rise in wage demands of actors and actresses; the shifting tide from big to small screens and the rise of OTT viewership on a mass scale, and more. The list could actually go on and on.

But, we can also distill this trend down to two simple factors; studios and producers believe streaming and TV productions have greater potential and sustainability for the future; and a big-budget series provides longer and better entertainment value than a big-budget movie.

Let us look at Marvel Studios, one of the titans of the entertainment industry in the 2010s. As a part of their ‘Phase 4’, Marvel has shifted focus from its exemplary run-of-big-budget movies to its future as a producer of both films as well as TV shows. Despite being the makers of three of the 10 highest grossing movies of all time, Marvel seeks to make the best of both worlds with a focus on harnessing the potential and value that the OTT sector provides. With WandaVision kicking off the MCU’s debut on Disney+ and Black Widow hitting cinemas this week, we are seeing this model unfurl in real time.

But the truly interesting element of this case is the amount Marvel is willing to invest in its TV productions. Black Widow is reported to have a budget of $200 million, which is well in line with Marvel’s previous movies. On the other hand, WandaVision cost them approximately $225 million; The Falcon and The Winter Soldier cost them over $150 million; and Loki (currently ongoing on Disney+) is also rumoured to have a budget of over $150 million. These figures are exorbitant compared to older Marvel shows: the five Defenders shows on Netflix, namely Iron Fist, Jessica Jones, Luke Cage, Daredevil were produced for a combined total of $200 million. As we see, Marvel has clearly loosened its purse strings for its foray into the OTT sector.

Marvel is not the only example though. Lucasfilm (and Disney) have also adopted a similar model for their Star Wars franchise (as seen with The Mandalorian), and Netflix too has steadily been investing more into its own productions (The Witcher, over $80 million; Snowpiercer, $50 million). When all is said and done, the entertainment world is most certainly moving towards streaming, and the big bucks are also following. While an average viewer pays far less on a subscription than he/she would on movie tickets, producers have begun equalising their spending on OTT productions and big-screen projects on a similar scale.

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