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Global Marketing

Global Strategy of Netflix

Netflix’s global expansion has remained a major factor in the organization’s success. By 2017 it was operating in over 190 countries, and in 2020 close to $20 million of revenue was international. Utilizing a global expansion strategy is not uncommon for tech companies, but Netflix faced unique challenges when expanding internationally. The organization had to examine national regulatory restrictions that limited content availability in certain countries. Additionally, Netflix had to negotiate content contracts that were customized to each country or region. International subscribers also speak different languages and have different customs, so there also lay the difficult decision of whether to produce new content for each market or to just add subtitles to Netflix’s current content. Many of the countries that Netflix aimed to expand into already had a streaming presence by competing companies. So how did Netflix overcome these obstacles and become such a global leader?

Netflix’s global strategy allowed them to be just as successful in foreign markets as the U.S. They partnered with local organizations in each new market to establish relationships and to make their content easily accessible to these new viewers. For example, they partnered with Telefonica in Latin America and Spain to integrate Netflix into local TV and video platforms. Netflix’s Chief Content Officer, in response to the preference of local content, began producing original content in many different countries to represent the local culture and languages. They successfully mastered local contexts, including the ability to acquire local knowledge and to demonstrate responsiveness and sensitivity. Netflix has proven that developing nation-specific knowledge is a critical factor for global success. In fact, UBS Global Research’s Eric Sheridan wrote in a research note following Netflix’s earnings report, “We view Netflix’s original, local content as one of the key differentiators and competitive advantages, especially given the discount of international content vs. domestic content.” Some successful examples of this strategy were Netflix's original shows Money Heist of Spain and Squid Game of South Korea. These shows were not only huge hits in their home countries but became global phenomenons.

Another crucial aspect of Netflix’s global strategy is that they did not try to enter all foreign markets at the same time. They started slowly with expansion into Canada, being that language and culture were similar to the United States. Netflix then began to develop the capabilities to expand into more diverse foreign markets while continuing to learn about internationalization. Investments in big data and analytics allowed them to facilitate this global expansion. Lastly, they gradually began to add more languages and personalizing algorithms to specific countries in order to best predict consumer viewing recommendations. Overall, Netflix’s global strategy has allowed the company to remain competitive as an industry leader.

References

Brennan, L.  (2018, October 12).  How Netflix Expanded to 190 Countries in 7 Years.  Harvard Business Review.  https://hbr.org/2018/10/how-netflix-expanded-to-190-countries-in-7-years.

Yahoo! (n.d.). How netflix's overseas expansion fueled its explosive growth in subscribers. Yahoo! Retrieved February 15, 2022, from https://www.yahoo.com/video/netflix-international-expansion-fueled-subscriber-growth-225708669.html