Despite the empty reels and missed notes caused by coronavirus, the global motion pictures and sound recording industry saw record foreign investment activity in 2020, as streaming platforms continued their content production drive.

FDI projects announced in the sector reached 97 last year — an increase of 7.78% on the number seen in 2019 — helping the US regain its crown as the leading destination globally, according to greenfield investment tracker fDi Markets. Foreign companies involved in motion pictures and sound recording — which includes film, TV and music production — announced a total of 15 projects in the US, up from six a year earlier. The UK (12), France (6), Germany (6), Canada and Australia (5 projects each) round off the remaining top six destinations across the sector.

This marks a change from 2019, when the UK was the most popular destination for the first time in a decade, as the US slipped to joint third with Germany in terms of FDI projects. 

In 2020, the top city destination globally was Los Angeles, which in December saw the BBC, the UK’s public sector broadcaster, announce plans to establish an LA-based team for its Natural History Unit. 

Further afield, the Asia-Pacific, Middle East and Latin America and Caribbean regions attracted less motion picture and sound recording investments in 2020 than a year earlier, while Africa received 4 inbound projects, including Universal Music Group (UMG), which announced projects into South Africa, Nigeria and Morocco.

Overall in 2020, US-based companies announced the most cross-border projects, including music publishing company Warner Chappell Music that opened a new Shanghai office in June, according to fDi Markets. Meanwhile, the most active investor was France-based Vivendi — the parent of UMG and other subsidiaries, such as INgrooves Music Group — which launched six locations across Mexico, Australia, and other markets. Famous film directors were also art of the action last year, with Peter Jackson’s New Zealand-based visual effects firm Weta Digital opening two offices in California.

Lockdown streaming boom boosts investment

Demand for streaming services has soared as a result of the pandemic, driving major players to continue investing for the long term. Between the last quarters of 2020 and 2019, Netflix’s paid memberships increased from 167.07 million to 203.66 million, while its spend on video content reached $17.03bn in 2020, according to company’s figures. Experts expect this spending to increase to $19.03bn in 2021, according to forecasts from financial comparison site Bankr.

In terms of its brick and mortar footprint, the streaming giant outlined a $150m project in November 2020 that will add 1.2 million square metres to its production hub in Albuquerque, New Mexico, on top of other investments into Argentina, Turkey and Mexico. More recently, Netflix announced in January that it was expanding its Asian footprint, leasing two new production facilities near Seoul, South Korea, according to The Hollywood Reporter.

Meanwhile, Walt Disney is planning to ramp up its direct-to-consumer content, outlining plans it will spend between $14bn and $16bn across its Disney+, Hulu and ESPN+ streaming platforms in fiscal year 2024, according to comments made by its chief financial officer Christine McCarthy in a call with investors in December. Along with these plans, the entertainment giant announced in January 2021 it will open a new audiovisual production centre in Spain to focus on directing its products to international markets in Europe and Latin America, according to El Español. Despite only launching in November 2019, Disney+ had reached 94.9m paying subscribers by January 2 2021, according to company statements. Walt Disney is aiming to grow paid subscription across all its streaming platforms to 350 million by 2024.

In the music industry, audio streaming platform Spotify saw its number of premium subscribers rise to 155 million by the end of 2020 — a significant increase from the 124 million at the end of 2019, according to company figures. At a recent company event on February 22, the Swedish music streaming giant announced it intends for its platform to become the world’s most popular, with plans to add 36 languages and make it available to consumers in over 80 new markets.

In 2020, Spotify announced two greenfield FDI projects — one to expand its operation in Miami, Florida, and another for a new office in South Korea — according to fDi Markets.

Cinemas feel the pandemic effect

Although industry observers placed huge hopes on movie titles such as Christopher Nolan’s action-thriller Tenet sparking a big screen renaissance, cinemas have been battered by coronavirus-induced restrictions. Consultancy firm Omdia estimates the global industry lost $30bn in box office takings last year, and also predicts cinema spending will take two to three years to recover to pre-coronavirus levels. 

Similarly, although predicting that global music revenue will more than double to $131bn by 2030, Goldman Sachs forecast it would drop by 25% in 2020 due to the problems experienced by the live music industry.

Max Signorelli, senior analyst for media and entertainment at Omdia, said that cinema closures have not hampered consumer demand for new content. “We are seeing consumers look to all subsequent video options to access premium entertainment,” he clarified.