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March 14, 2024
Netflix Dedicates $7.9 billion to Overseas Content
Netflix focuses more on the international market for the first time in its projected budget, but success from international titles is not foreign. By Ching Wai.
US - Netflix is projected to dedicate $7.9 billion of its estimated $15.4 billion total towards production outside of North America, as forecasted by Ampere Analysis. This budget results from how international content is generally produced with a lower budget and has garnered increasing interest from U.S. audiences, while U.S. streaming services seek to expand their services to a wider international audience in the hopes to increase their subscriber numbers.
For the first time, instead of focusing on the local market, the majority of Netflix’s budget will be dedicated to localised original content for international markets or the licensing of international production. According to Ampere forecast, content spending in North America is expected to drop more than 20% from 2022 levels over the next five years, while content spending in global streaming is expected to rise 44% in the same timeframe.
This comes in line with how media companies are currently re-strategising and restructuring outside of television. This pushes Netflix to change up its budget spending to be ahead of the competition as it had done in recent years within the domestic U.S. market, when companies like Amazon, Disney, HBO Max, Peacock and Paramount launched their own streaming services. As Netflix suffered a decline in subscribers in 2022 from the competition, the streaming service managed to increase revenue and user numbers by launching a cheaper ad-supported tier.
As international content generally demands a lower production cost or can be acquired at a lower cost (sometimes because of looser labour laws in other countries), and has an increasing interest from the U.S. audience, it makes sense that Netflix is dedicating more funds internationally. A successful example would be South Korea’s Squid Game, which had a budget of around $21 million, which is less than a tenth that of the reported production cost of the fourth season of Stranger Things, and yet is one of Netflix’s most watched titles. At the same time, wth the U.S. streaming market coming to a slow-down, streaming services seek to expand into less saturated regions. To stay ahead of the game, Netflix has to spend more to grow its subscriber base in regions like Sub-Saharan Africa and India. Still, from overcoming revenue slumps to an overarching continuous increase in revenue, Netflix instils confidence that its projected budget will be beneficial and generate satisfactory results for both the company and its patrons.
