Why Netflix’s Global Content Strategy Is Doubly Effective

The world got a rare glimpse into Netflix’s user base on a country-specific level last week, when the streamer’s VP of content for Japan disclosed that subscribers passed 10 million in the country in the first half of 2024, according to Reuters.

Japanese Netflix subscribers have doubled in the last four years, the executive added, with local content — that is, Japanese-language titles produced in the country — helping to fuel the growth.

As the Reuters report also pointed out, and a look at Netflix’s country-by-country top 10 lists confirms, only two English-language series (“Stranger Things” Season 4 and “One Piece,” the live-action adaptation of the Japanese manga and anime series) have hit No. 1 on Japan’s weekly top 10 lists since Netflix started reporting them in 2021.

Japan-produced content, on the other hand, is hugely popular in the country — the latest season of anime “Demon Slayer” topped the Japanese chart for eight straight weeks this year — highlighting the importance of local investments to Netflix’s global strategy. Ted Sarandos & Co. have long touted the service’s ability to offer “something for everyone,” a position that requires catering to international viewers who prefer homegrown programming.

“Japan in particular is a country which wants to see a lot of its own content, so we strongly feel the need to produce it,” the Netflix content VP Kaata Sakamoto said last week.

The ability to produce such content all over the world has helped to solidify Netflix’s global dominance in the SVOD space, while also positioning it extremely well for the next phase of streaming. Netflix’s chief legacy media rivals — Disney+ and Warner Bros. Discovery’s Max — simply can’t afford to invest so heavily in hyperlocal content as they attempt to rationalize spending and grow their businesses into consistently profitable operations.

Unfortunately, doing so requires continued expansion in international markets — those where Netflix already has an entrenched presence and can provide a seemingly endless supply of localized programming. To return to Asia, overall content spending in the region of India and East Asia grew by just 4% in 2023, according to a Media Partners Asia report; meanwhile, Netflix grew its spending in the Asia-Pacific region by 15% that year.

With SVOD increasingly shifting into a global business (as discussed in November’s VIP+ special report “The Globalization of Streaming”), companies attempting to take their platforms worldwide, such as Disney and WBD, must optimize their spending in a way that can generate the highest return on investment, ideally through content that appeals to numerous international markets.

It’s no surprise, then, that Disney has been expanding its slate of Korean content, which has long been considered some of the most exportable non-English language media. For instance, South Korean titles have also proven very popular in Japan, accounting for more than a third of the No. 1 TV shows on Netflix in the country since data became available.

But Korean content especially can thrive across not only Asia but the globe; Netflix’s “Squid Game” remains the international streaming hit par excellence, with the first season still by far the service’s most-watched original in both hours streamed (2.2 billion) and estimated complete views (265 million).

No non-English language series has come close to matching that success, of course, and the long-awaited second season of “Squid Game,” premiering later this month, will be a major test of the English-speaking world’s continued appetite for international content.

But that dynamic obviously works in reverse: Even if its English titles aren’t resonating in Japan, Netflix can take comfort in the fact that they remain highly exportable.

Based on a VIP+ analysis of Luminate and Netflix data, only about 20% of the record-breaking viewing time for “Wednesday” in its first 91 days occurred in the U.S.; ditto this year’s most-viewed TV season, “Bridgerton” S3.

This is to say that, as the globalization of the streaming and content businesses continues, Netflix’s advantage over its competitors is twofold: It possesses the financial firepower and scaled engagement necessary to produce both a myriad of localized content and worldwide blockbuster hits.

This point may seem obvious, but its implications for the future of the content business are significant. Popular as “Star Wars” and Marvel might be at the global box office, their Disney+ offspring, by all indications, can’t match the success of seemingly random Netflix titles including British crime drama “Fool Me Once” (the No. 8 most-streamed English TV season of all time on the service by estimated views).

To succeed, therefore, Disney — and all would-be global streamers — will need a carefully calculated approach to its content business, weighing which territories can produce local content that is both resonant to its respective market and significantly exportable, while still balancing that investment with the required big swings for true home run hits.

In other words, memo to Hollywood: If you think the content business is risk-averse now, just wait — worldwide appeal will only become more significant in the years ahead.