Netflix is available in almost 190 countries, making it the market leader in the online streaming platform in the world. As of 2020 Netflix has 183 million subscribers. Headquartered in place, U.S Netflix is operated in many regional markets internationally. More than 50% of Netflix subscriptions comes outside of the United States. This success and widespread in the international market are attributed to various globalization strategies which will be discussed in this article.
Reasons for Globalization:
The global movie industry is estimated to be worth $138 billion in 2018. Netflix video streaming was first released in the United States. All the content that was hosted on its platform was through getting timed licenses fro production houses. Most of this collection is centered on the English language. With its initial success in the domestic market, Netflix started to roll out its platform in Canada with little to no change in its content catalog as English is a majority language in Canada. It surely is the first step for Nelflx globalization. The main reason was is for expanding its market. It was a clear success and it helped Netfix to tap into the international market through exporting its online content. Having no additional costs in the expansion of its market can be attributed to the reasons for Globalization.
Netflix soon realized the trend and demand for online streaming content with its first-hand experience from Canada it aggressively pursued and ventures into markets where English is a major language. It was successful in European counties and developing economies likes India. In its early days venturing into non-English speaking countries like Brazil, India, etc., Netflix started producing its own content but in English. This was also considered as a success, however, given the expansive and highly granular market like India, Nelfix decides to acquire licenses for the best movie collections in respective native languages. This step paved path for localization in its content. Series and movies were made in local languages but had production values that are on par with its counterparts in Hollywood which eventually grabbed global attention.
Porters Diamond model on Netflix Globalization:
Netflix started producing content in Hollywood with its exclusive platform releases which were estimated to cost at $15 billion in 2019. The second-biggest movie industry Bollywood accounts for a total budget averaged about $2.5 billion for all the films that the country produces in a year. The factor conditions like skilled labor force, creative talents in emerging countries are far cheaper than in Hollywood. Thes factor conditions made Netflix aggressively pursue producing content from India in its regional languages which are very local but had global appeal though its production values and it’s platform infrastructure that enables languages and subtitles in other major languages like Spanish, French, etc.,
Demand conditions are for content is extremely high as in developing economies like India, movies and series are considered as primary sources of entertainment. As the internet became cheaper, accessing video content through mobile devices has become widespread in India. Netflix came up with a mobile-only subscription model in India. This innovative subscription model helped achieve a more sustainable competitive advantage.
With the industry giants like Disney venturing into the online streaming platform and acquiring companies like Hotstar in emerging economies, it would be interesting to see how Netflix maintenance its edge in the international market in the thriving competition.