A guideline to success when expanding a company globally is setting the global budget. Netflix is an example of a company that has committed a high level of capital to international marketing efforts. Netflix was founded in 1997 as a VHS streaming service and has adapted to change the way TV is consumed. Netflix is now a streaming giant where subscribers can log on to watch their favorite movie or TV Show with a single click of a button and along with paying to show other content, the company also produces a massive amount of its own content, attracting the top movies stars from countries around the globe. Starting in 2012 the company began to expand internationally in Canada and by 2016 the country was present in 130 countries. As a part of this international expansion the company introduced content in local languages and subtitles. Netflix’s original, local content as one of the key differentiators and competitive advantages, especially given the discount of international content vs. domestic content Shows like South Korea’s “SquidGames,” Germany’s “Barbarians” have been domestic and international hits. SquidGames became a top show in the United States and became a cultural phenomenon culminating in many Americans dressing up in SquidGame costumes for Halloween. Another example of a show that has gained success in the US is the French series “Lupin” which topped out at #2 of most popular shows in 2020. Netflix appealed to potential subscribers in new countries by having content available in the local language with domestic actors and producers along with select popular content from its US streaming platforms.
By 2021, the streaming service is live in 190 countries with more than 290 subscribers worldwide, much more than than 35 million subscribers Amazon has around the world. The streaming giant has 15,000 titles across its international libraries and earns an annual international revenue north of $25 billion. Netflix currently charges $14/month for its basic services in the US, but the company has taken adapted its standard plan prices in different markets based on the amount average income level of potential subscribers in the country and for the amount of content that is available in the country. Netflix most affordable subscriptions are $2.98 in Turkey, $4.55 in Pakistan $6.30 in Argentina, $6.60 in India and $6.77 in Colombia. The company has seen success international in original content and they plan to continue to produce original content with 47% of the worldwide budget planned to be spent on original content in 2025, up from 38% in 2020. The other half of Netflix’s content comes from third party creators and for international audiences, local third party content is hard to obtain and produce on its streaming platforms.
In 2019, the company spent 7.9% of its total revenue on international marketing accounting for $1.5 billion being spent on international advertising. I had a first hand experience of the wide reach of Netflix international marketing when I traveled to Johannesburg, SA. When walking to the baggage terminal from the gate, we walked by numerous Netflix posters and signs advertising the service. And interesting with between Netflix international and domestically is that they have a deal to stream NBA games through their service. All of the advertisements in the airport showed NBA stars and highlighted when their team plays. This approach reminds me of Netflix competitors, YouTube TV and Hulu, both of which have deals to stream live sports domestically. Netflix has taken advantage of the international love for NBA and the undeveloped streaming services in new countries like South Africa throughout the world.