Opinion: Atwater Capital’s Carol Lim on private equity’s interest in local language


Carol Lim, principal at US-based investment firm Atwater Capital, explains why streaming giants must think globally when making their investments in local language content.

The influx of private equity capital into the media and entertainment sector has garnered significant attention of late. What has been less well documented, however, is how much of this capital is being invested into studios, production companies and creative teams outside of North America. Local language content has become hot property, with the theme a notable talking point this year at Cannes, where significant buzz was generated by the deals sealed by European content players. The likes of KKR- and Atwater-backed Leonine and Mediawan, two companies which were at the heart of countless conversation on the Croisette, are emblematic of a new wave of well-capitalised independent local language players redefining the global content landscape.

Having previously been considered by mainstream audiences to be the preserve of indie film festivals and obscure film critic shortlists, local language content is now being recognised on its own merits for its range, storytelling and creativity. It is this quality which is proving so attractive for both streaming platforms and investors. As consumers cut back on subscriptions in the face of a global cost of living squeeze, it has become clear that the onus is on streaming platforms to offer a service perceived to provide value for money.

Creativity and originality have emerged as principal differentiators for platforms operating in an increasingly saturated market. Distinctive, owned content is rightly being recognised as fundamental to long-term success, with talented writers, actors, directors and production teams proving integral amid fierce competition for high-value intellectual property. The consensus now is that local language content should play a key role in forming a properly curated, first-rate content strategy.


Hands off the buffet

We’ve seen in recent weeks how failing to adequately curate output can have hugely damaging results for platforms. For the first time in its history, Netflix reported a reverse in subscriber growth with 200,000 subscriber loss worldwide during the first quarter of the year, sending the company’s stock down close to 40% in a day. Much of the blame for the platform’s struggles has been ascribed to its apparently formulaic approach to programming, based on investing capital seemingly at random into low-quality, repetitive projects. As of April 2022, the platform had over 17,000 titles globally – a sizable increase from the 15,400 it offered in January 2018. This recent subscriber loss suggests that what has been derisively described as a “buffet-style approach” to content creation may not necessarily translate to success.

A tried and tested strategy offers Netflix a route back to growth – investing in high-quality, local language content. The company has previously had success with this approach. Squid Game, La Casa De Papel, Dark, Call My Agent and Fauda are prime examples of local language titles that have received critical acclaim and proven to be considerable ratings hits. The successes of these titles illustrate the cross-cultural appeal of local language content, as well as the considerable creative talent which exists outside the Anglosphere. Netflix should look to double down on investing in and supporting talent from across the world, an approach which will ensure that new projects are considered, relevant and part of a properly curated content strategy.

Crucial to success

Moving into local language content is not solely about winning back market share with English-speaking audiences; it is crucial in ensuring a platform’s success in new geographies. For instance, Disney+ Hotstar has 50 million subscribers alone, making up approximately 35% of Disney+’s total subscriber base despite being only available in India and a handful of countries in Southeast Asia. The brand not only has libraries of local content, but also spent a hefty fee to secure the broadcast rights to the popular Indian Premier League (IPL). Going forward, Disney is further banking on this strategy with 500 local language shows in its pipeline. According to Christine McCarthy, the company’s SVP and CFO, 100 of these shows will be in India, 140 in APAC, 150 in EM EA and 200 in Latin America.

Outstanding content ultimately transcends language barriers. If streaming platforms are to remain competitive amid an increasingly challenging landscape, it is vital that the content they curate is mined internationally. And to get it right, services should also look for local partners with access to talent and an understanding of what is culturally relevant. Developing a diverse pool of high-quality, curated content can bring back English-speaking audiences fatigued by low-quality content, while also appealing to audiences in markets with vast, untapped potential. The platforms that fail to do this will continue to struggle. The platforms that do will have the world at their feet.

Carol Lim is principal at Atwater Capital, a US-based investment firm that backs Leonine and Mediawan and has previously held stakes in companies including ‘Mare Of Easttown’ producer Wiip.

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