Share of Netflix Originals Produced in US Dips to 40%; Company May Have to Rethink Global Strategies
Netflix’s most recent earnings report likely left rival executives shaking their heads in a mix of disbelief and animosity mingled with respect. The world’s largest streaming platform now has 238.39 million subscribers, adding nearly 6 million in the second quarter of 2023 alone; even if Wall Street wasn't overly impressed.
One might suspect the fact that the Writers Guild of America (WGA) and Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) are on strike would put at least a small crimp in Netflix’s style, but that’s not the case. Indeed, Netflix may be well-positioned to weather even a prolonged strike, as it produces shows in many territories around the world, not just the United States.
Amidst the success of series like “Squid Game,” Variety reports that a recent study by PlumResearch and Omdia indicates that of all Netflix originals produced around the world, only 40% are now made in the U.S. In 2017, that number was closer to 60%, but steady investments by the company in more international content have caused the American share to drop.
Originals make up 55% of the total Netflix library, but more and more of them are coming from South Korea. That country now makes more content for Netflix than any country besides the U.S., and the streamer has pledged to spend $2.5 billion on Korean content by 2027.
“We don’t make global shows. We make local authentic shows in every country, and they’re on a global platform,” Netflix chief content officer Bela Bajaria said in June. “And because stories can be universal, and themes can be universal and people can have access for the first time. So this will lead to shows and films from different countries, other people may find them and love them, and they’ll connect with a global audience. But we really make local shows on a global platform.”
The problem for Netflix is that outside the U.S. and South Korea, locals don’t seem to be all that interested in content created in their countries. The same Plum/Omdia survey shows that no territory, besides those two countries, spends more than 50% of total Netflix viewing time watching originals that were produced in its specific market. In fact, locally-produced originals don’t account for even 20% of watching hours in any other surveyed nation.
This suggests that Netflix may have to start thinking about how it deploys its resources more strategically. The company plans to spend $17 billion on content this year alone, but that may be where its content outlay peaks. Producing shows all over the globe can get expensive fast, and if locals aren’t responding to them, there’s not much incentive for Netflix to keep making them.
That will be especially true once the WGA and SAG-AFTRA strikes end. American and Korean audiences still respond to locally-produced originals in a big way, and the content investment in those two countries will likely remain as it is. But in territories where more time is spent watching non-local originals and licensed titles, Netflix may start to pull back its efforts to make shows specifically geared to audiences in those places.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.