A 9-episode foreign-language romp through a dystopian murder game is the hottest entertainment option in the world right now. It’s called “Squid Game,” and it’s an example of everything that’s right about Netflix.
Netflix CEO Ted Sarandos says the show is “on the way” to becoming the streamer’s “biggest show” ever. In fact, South Korean internet service provider SK Broadband has sued Netflix to pay for increased network traffic and maintenance work because of the sudden viewer surge.
What the Heck is ‘Squid Game’?
If you haven’t jumped in yet, “Squid Game” is the story of a man named Seong Gi-hun who’s on the run from loan sharks. One day, he gets the opportunity to play a game for an outrageous sum of money. He takes the chance and finds himself competing against 455 other people for the prize. The “game” is essentially a prison where contestants must compete in high-stakes versions of children’s games. Winners advance, losers are killed.
It’s the fever dream fusion of “The Running Man,” “Battle Royale,” “The Hunger Games,” and “Parasite.” It tackles issues of class, immigration, ageism, and sexism. It’s wickedly funny and shockingly dramatic. Episode 6 is a masterclass in drama.
“Squid Game” is the perfect example of what makes Netflix a vital part of any entertainment ecosystem.
Pushing the Envelope
Netflix has a luxury that other streaming services don’t. It’s unpredictable.
If you sign up for Disney+, you know what you’re going to get: animated movies, Pixar, and a slew of Marvel and Star Wars content. So far, the service hasn’t had any breakout hits that aren’t extensions of their existing properties. While familiar stories do have a draw, some viewers may grow restless for something new. This explains why Disney+ saw a surge of subscriptions during the July 2020 release of “Hamilton,” and then a wave of cancellations immediately after.
HBO Max bets on DC superhero fare and Very Adult Dramas. Hulu gives up the bulk of its kids’ programming to Disney+ and hasn’t settled on a long-term vision. Apple TV+ is riding a “Ted Lasso” high and trotting out gorgeously crafted special-effects-laden multi-year sagas.
But if we try to “define” Netflix, it’s very hard to do. There’s reality trash like “Love is Blind” and “Too Hot to Handle.” There are thoughtful, Oscar-winning documentaries like “Icarus” and “My Octopus Teacher.” You have critically acclaimed films like “Roma,” “The Irishman,” and “Mank.” “The Queen's Gambit” is a one-off pseudo-biography phenomenon. “The Crown” decimates the Emmys every year. “Bridgerton” is a steamy period piece with a Shonda Rhimes pedigree. “Stranger Things” appeals to 80s nostalgia and Stephen King-style weirdness. “Tiger King” and “Making a Murderer” are buzzy, riveting documentary series.
It would be crazy to start a streaming service with the strategy of throwing things against the wall to see what sticks. But because Netflix was the first mover in this category, they hold a significant advantage with more than 200 million potential screens ready to sample something. Because they’re expanding so rapidly overseas, they get to tap the world’s creative community. Because they don’t have to honor theatrical windows or TV schedules, they can drop their content whenever they want. And because they’ve carved out this niche as a grab-bag of content, their users reward them when they branch out.
They also give creators near-unprecedented creative control. “Thanks to Netflix, there was no limit and I was given creative freedom to work as I wanted to,” said “Squid Game” director Hwang Dong-hyuk.
If you were a content creator working with HBO Max, you’d face layers of bureaucracy and the ultimate question of whether you’re bringing value to AT&T shareholders. Netflix shareholders know what they signed up for - the lottery ticket that a crazy Korean miniseries could become the biggest cultural event of 2021.
Since so many people have Netflix as a set-it-and-forget-it streaming subscription, the “hot new thing” becomes something most of your friends already have access to. While some people may have let their membership lapse, the majority of subscribers stick around in anticipation of the next big thing. This, in part, is why Netflix has an industry-low churn rate. Will you keep your Apple TV+ subscription for a whole year waiting for the next season of “Ted Lasso” to come around?
It’s important to note how Netflix leverages its scale to cash in on these titles. With 209 million subscribers around the world, it only takes a spark for a promising series to turn into a wildfire.
That enormous user base amplifies the reach of a hit show on other platforms. People have recreated “Squid Game’s” red light-green light game on Roblox, exposing the show to a whole new audience.
With the social media mentions, viral videos, and video game spoofs, audiences on other platforms may start to feel they’re missing out. When people are looking to figure out what’s going on, they turn to Google. The search engine shows an exponential rise in “Squid Game” search traffic since September 18. The traffic even dwarfs huge Hollywood productions with millions of dollars in ad spend. Look at how “Squid Game” compares to current Marvel titles “Venom: Let There Be Carnage” and “Eternals,” or James Bond in “No Time to Die.”
As the buzz builds and the signal amplifies, users are returning to the platform, as evidenced by this jump in app downloads:
By dropping the series a few weeks before Halloween, you’re guaranteed to see “Squid Game” costumes overtaking your social media feed shortly. Between this and “Money Heist,” Netflix is likely the #1 driver for the demand of red jumpsuits.
The great trick for Netflix is that once you’re sucked into the ecosystem by something like “Squid Game,” you’re liable to stick around to sample something else. And if you forget to cancel the service, you’re likely to let the subscription roll on. All of that makes Netflix very happy.
If there is a knock on Netflix, it’s that it’s hard to anticipate when the next “Squid Game” is going to come along. We know Disney will churn out roughly four Marvel movies and two Pixar every year. They’re all of roughly comparable quality, which makes them a fairly safe bet for your entertainment dollar.
Netflix doesn’t get to draw from much existing intellectual property, so it is initially more limited than a service that can mine “Star Trek” or “The Lord of the Rings.” Every spin of the Netflix roulette wheel is different. The unexpected success of some of these shows suggests that Netflix can attain a solid hit rate simply by virtue of the sheer amount of content it’s creating.
In fact, when Netflix has tried to dabble in areas where other streaming services dominate, it has struggled. The superhero series “Jupiter's Legacy” landed with a thud this year, probably because viewers look to Disney+ or HBO Max for their superhero fix. The Netflix animated roster also offers mixed results. If you have to entertain little kids, you’re more apt to go for “Sesame Street” on HBO Max or a Disney movie.
While Netflix has spent big to lure talent like Chris Hemsworth, Sandra Bullock, and George Clooney, it has managed to create hits with no-name casts. Perhaps the next major hurdle for the service is to start creating stars of its own. Beyond Millie Bobby Brown, we haven’t seen the Netflix pipeline produce any major stars.
Still, Netflix has only been creating original content for eight years. Already, 83% of its library is exclusive to the platform. To have this cultural impact this quickly is nothing short of astounding. It would be foolish to think the streaming giant would give up the crown as easily as some Wall Street analysts believe.
Those watching the industry may be concerned Netflix can’t recreate “Squid Game.” But Netflix isn’t trying to. They’re innovating again. And it’s only a matter of time before they create something even bigger.