A Globalized Media Market

April 27, 2020  •  David Pring-Mill

By David Pring-Mill

Streaming services are chasing subscriber growth in nearly every corner of the world but they’re not just trickling out the same content. As the audience becomes broader and more diverse, there’s an opportunity to bring new cultural layers into storytelling. 

The industry regularly fails to meet its own aspirational standards for diversity and inclusion but there are ongoing efforts to bridge that gap. Some of these efforts are domestic; others are international in scope. Hollywood insiders say that they’re increasingly involved with more content that is being made outside of the US.

But it’s all very delicate. It’s possible that international expansions from US-based media giants are actually blocking the pathway to success for media startups that tried to emerge within the newly targeted markets. Singapore-based streaming service HOOQ failed for a myriad of reasons but it might be a partial example of this phenomenon.

Prior to the global pandemic, at the end of 2019, Netflix had raked in over US $20B in annual revenue, which was below some analysts’ forecasts. However, the company added more international subscribers than anticipated.

Earth: a globalized media market

Netflix characterizes itself as being available “virtually everywhere,” with the exception of China. Many tech and media companies have not entered the Chinese market due to the government’s desire for censorship. In addition, some tech companies that entered the Chinese market through joint ventures have complained of forced IP transfers, followed by squeeze-outs. This issue was raised during the US-China trade war and the resulting agreement aimed to address it.

Netflix’s long-term overview for investors revealed its marketing strategies for new markets: “Our growth internationally will unfold over many years as we improve our service. In the 130+ new markets we launched in 2016, we started by primarily targeting outward-looking, affluent consumers with international credit cards and smartphones.”

In India, Netflix offers an inexpensive, mobile-only version of its service, restricted to a single device with 480p streams.

The company is adding more content in more languages and trying to raise awareness of its offerings in new markets. As Netflix tries to widen its content library and subscriber base, with those efforts intertwined, it has explicitly noted “that there are cultural differences and some variances in content tastes around the world.”

Still, the delivery of that storytelling, be it market-specific or universal, remains complicated by “challenges with the broadband and payment infrastructures in certain countries.” The pursuit of a global market also positions Netflix against legacy business models and practices. Regional restrictions on distribution have traditionally been a key part of licensing deals.

Technology has globalized the marketplace for media content. This could impact culture, artistic expression, and business competition in both positive and negative ways. Big-budgeted productions with universal storytelling will be favored by some media brands but there’s also room for more culturally-specific storytelling with low, mid, and even big budgets.

If some of that content is created directly for a streaming service, the pressure of immediate theatrical box office gross goes away and the nature of marketing changes. 

Some streamers have given their movies limited theatrical releases, as a courtesy to the filmmakers, as a way of qualifying for awards, or as a fulfillment of a contractual requirement. In some of these instances, the theatrical releases were externally deemed to be failures but they actually generated buzz and attention, which later translated to sustained performance in the streaming environment.

These globalized and significantly-altered release strategies will influence the cultural content of the future.

This is part of an ongoing series of articles about major disruptions in the technology, media, and telecom sector. You can read the other, related articles in Quick Insights and check the Whitepapers section for periodic, in-depth analyses. Subscribe for updates here.

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