Insight of the Day: Streaming’s ‘Squid Game’ Dilemma: Can Non-English Content Drive Both Subscribers and Revenue?

Detailed Findings:

1. Rising Popularity of Non-English Content:

   • Shows like Squid Game and Spanish and Korean productions are increasingly popular with North American audiences.

   • Over 60% of Netflix subscribers globally watched at least one Korean title in the past year.

2. Production Trends and Cost Considerations:

   • Rising production costs are driving studios to shoot in tax-friendly locations like Georgia, Croatia, and Belgium.

   • Many tax incentives require the creation of local language content, making these markets appealing for production but challenging for English-speaking audiences.

3. International Growth Challenges:

   • Subscriber saturation in the U.S. and Canada has shifted growth to international markets, now accounting for:

     • 70% of Netflix’s global subscriber base.

     • 80% of its quarterly subscriber additions.

   • However, international audiences generate lower average revenue per user (ARPU) compared to North America.

4. Streaming’s Profitability Dilemma:

   • To grow, platforms must invest in local content for international markets.

   • To maximize profits, they need content that appeals to high-yield North American subscribers, who often prioritize English-language content.

Reasons for Success of Non-English Content:

• Shows like Squid Game succeed due to universal themes, high production quality, and compelling storytelling that transcends language barriers.

• Growing cultural curiosity and global accessibility foster cross-language viewership.

Trend Reflected in the Article:

• Globalization of Media:

  • Streaming platforms are embracing non-English content to drive international growth.

  • There is a cultural shift where North American audiences are increasingly open to subtitled or dubbed foreign productions.

Consumer Motivation:

• Novelty and Quality:

  • Audiences are drawn to fresh, unique narratives that differ from formulaic domestic productions.

• Global Curiosity:

  • Viewers enjoy exploring different cultures through media.

Big Social Drive Reflected by Trend:

• Cultural Cross-Pollination:

  • Streaming platforms are democratizing global storytelling by introducing international cultures to mainstream audiences.

  • This trend fosters greater acceptance of and interest in diverse perspectives.

Big Social Trend:

• Diversification of Content:

  • Both creators and consumers are moving toward a more inclusive, globally connected entertainment landscape, breaking the dominance of Hollywood-style storytelling.

Strategy to Follow by Brands:

1. Invest in Dual-Market Content:

   • Develop non-English shows with global appeal, blending local authenticity with universal themes that resonate across cultures.

   • Example: Squid Game's commentary on capitalism appealed globally.

2. Leverage Cultural Curiosity:

   • Promote international content as a way to “travel the world” through stories.

   • Focus marketing efforts on storytelling quality rather than language.

3. Optimize Localization:

   • Provide high-quality dubbing and subtitles to ensure accessibility and engagement for North American audiences.

4. Diversify Revenue Streams:

   • Pair international growth with additional monetization models like merchandise, licensing deals, or live events to supplement lower ARPU.

5. Balance Investments:

   • Strategically split resources between high-return English-language productions and culturally authentic non-English projects.

Source: https://observer.com/2024/12/hollywood-streaming-foreign-language-content/