TBI Tech & Analysis: Why SVOD giants have embraced non-US content

Squid Game

Tim Westcott, Omdia’s senior principal analyst, digital content and channels, explores why Netflix and Amazon Prime Video continue to invest in non-US programming, despite pandemic-driven impacts on new original content launches.

Netflix is under pressure from investors after its disappointing first quarter results and full year forecasts, but as a powerhouse of original content it continues to forge ahead.

In 2021, according to exclusive research by Omdia, Netflix launched a total of 552 original first-run titles, an average of just under 11 a week. This amounted to 1,873 hours. Cash investment on content grew to $17bn, compared to $11.8bn in 2020. Given long production lead times, this figure is not going to exactly sync with transmissions of new content, and Netflix actually launched 24% fewer new titles in 2021 than the year before – 28% less in terms of hours.

This slight downturn is mostly an after effect of the COVID-19 lockdowns of 2020, which disrupted production and slowed the delivery of new productions to the platform. Another reason could be that Netflix is being more selective with its production investments. The streamer remains well ahead of the competition, particularly in the global streaming space. Amazon released 102 original titles (406 hours) in 2021, with titles down 31% year-over-year (YoY) and hours down by 24%. In 2020 versus 2019, Amazon increased original titles by 72% and hours by 42%.

It should also be noted that Omdia uses a strict definition of an original production, as one that has either had its first transmission on the platform or that has aired first on a linear channel but is significantly funded by the online platform. So our definition of “original” may be at variance with that of the platforms themselves.

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International importance

International productions are increasingly important to the worldwide growth plans of Netflix. It has had more subscribers outside the US than at home since the end of 2017, and by the end of last year, there were more than double the number outside the US.

Squid Game was a worldwide hit and the most-viewed series on Netflix in the second half of last year. It was originated in South Korea, where Netflix said it invested $452m in 2021. Netflix invested $1bn in the UK and $500m in Mexico and has earmarked $220m for France in 2022.

In 2021, for the third year in a row, the streamer sourced more original productions from outside the US than within: 1,024 hours (55% of the total) versus 848 hours (45%) from the US. This was the lowest volume of new US hours on Netflix since 2016. Netflix reported that it subtitled seven million minutes of content in 2021 and dubbed five million.

In comparison, Amazon launched 262 hours (65%) of non-US programming in 2021, down from 338 hours (63%) in 2020. There were 143 US hours in 2021 compared with 195 hours in 2020. Amazon recently completed the acquisition of MGM, the Hollywood producer, which may make its catalogue less rather than more international, and the e-retailer has been more limited in its international outlook than its main rival.

The excerpt above is taken from Online original production – 2021, an insight report published in the Digital Content & Channels Intelligence service, which is produced by research powerhouse and TBI sibling, Omdia.

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