Content spending per user and ARPU of Netflix and Amazon Prime Video 2023
In 2023, Amazon Prime Video is forecast to invest around 50 U.S. dollars per user on content, while Netflix will allocate over 70 U.S. dollars per user. However, despite Netflix investing more in content, the streaming giant is likely to generate a higher annual revenue per user (ARPU) than Amazon's streaming platform.
Impact of the industry’s strike on productions
Due to the writers’ and actors’ strikes in Hollywood in 2023, content spending of Netflix decreased by over three billion U.S. dollars year over year, as the company saw a temporary decline in scripted TV show productions and releases. In 2024, the streaming company is expected to grow its content budget again to around 17 billion U.S. dollars, with over half of Netflix’s expenditures going towards content produced outside of North America.
Fighting losses and churn
Despite being the streaming business with the highest costs, Netflix made the most operating income among leading streaming providers in 2023, at seven billion U.S. dollars. Other media companies, such as Disney and Paramount, even generated losses with their direct-to-consumer segments. Furthermore, Disney has struggled to retain Disney+ subscribers and implemented several cost-cutting measures, like spending less on content and laying off thousands of employees, to offset churn and income losses.