Netflix Isn’t Made for the US Anymore—It’s for the Whole World
The latest Adam Sandler movie, The Ridiculous 6, has a one-star rating on Netflix. It receives a rare 0 percent score on review-aggregator Rotten Tomatoes. The regrettable portmanteau “Pocahontits” is spoken less than five minutes in. It is a bad movie. It also was, within 30 days of its release, the most-streamed movie in the company’s history. This is how it goes in Netflix World.
Netflix has long had a global focus; it started the year in 60 countries, after all. And you can already see its international efforts reflected in some of its shows. Netflix executives point out that 80 percent of the dialog in Narcos is Spanish, and Adam Sandler “travels well,” which is to say, his appeal crosses borders, if not critical thresholds.
But with last week’s expansion into 130 international markets, Netflix now plays to practically every country on Earth not named China. It’s the first truly global content network, which has serious implications for the shows and movies it makes, and for how you watch them—especially if, as an American, you’re used to thinking of yourself as the center of the tech world.
“I’ve been getting hourly updates since we turned it on,” says Netflix product chief Neil Hunt. The “it” in this case is Netflix, become available to millions and millions of potential new customers around the world on Jan. 6.
Updates like that, the kind that tell Hunt who’s signing up, where they live, what they’re watching, and how much time they spend deciding what to watch, fuel Netflix’s operations. By now, you probably know the company bases programming decisions—which increasingly means investmenting in original content—largely on what the data says customers like to watch. The same applies to the user interface, which is consistent worldwide with a few exceptions, mostly to accommodate countries that read right-to-left.
“We’re very much focused on building a global product, in part because we think it’s much more efficient,” says Hunt. “Even though the content library is distinct in each country, the principles we use are pretty universal.” Those principles are shaped almost entirely by new users. Current subscribers aren’t used as guinea pigs, Hunt says, because that doesn’t measure the effectiveness of a new product, only the change itself.
It’s hard to grasp the significance of this until you throw some numbers into the mix. In the last 12 months alone, Netflix ran 160 A/B tests, each representing two to 20 different experiences. The experiments focus on everything from how to enlist new users to UI adjustments (how big should the thumbnail be, and what should it show?) to algorithmic tweaks that determine what content surfaces for which audience.
Your Netflix experience, in other words, is largely determined by people approaching the service for the first time. Every minute change has been vetted by the responses of millions of new users—most of whom, it turns out, aren’t from the United States, or even the Western hemisphere. “In the last several quarters we’ve had two to three times more new international customers [than stateside],” says Hunt. “The choices we’ve made over the last year have been biased toward Europe and Japan.”
Now imagine what happens to that multiple when you switch on 130 new countries all at once.
“It’s entirely possible that Netflix will see significantly faster growth in international subscribers with this new expansion, perhaps up to 20 million in a year,” says Jan Dawson, founder of Jackdaw Research. That would double 2015’s international growth, each new first-time sign-in helping shape what Netflix looks like for the rest of us.
Some further perspective: As of its most recent quarterly earnings report, Netflix had 37 million total US subscribers, growing at a rate of a little under four million per year. Its 16 million international subscribers were a little less than half that. At those rates, not only will the international new-subscriber numbers dwarf the domestic gains, it won’t be long at all before Netflix has more total users outside US borders than within.
If a user interface could ever be described as a melting pot, Netflix has made just that. And as it continues to broaden its reach, it will provide an experience that’s more Singapore than South Carolina.
Global Content Is King
The rise of Netflix World also has serious implications for those who consider how you scroll and click through the service secondary to what they watch. As Netflix increasingly invests in original content, it’s aiming for shows and movies, like Narcos and Ridiculous 6, that transcend cultural specificity. That’s already happening, however, at least in part as a happy accident of universal taste.
“Part of what’s been fascinating for us is that the 60 markets we’ve been in, the content that succeeds tends to be somewhat consistent,” says Elizabeth Bradley, VP of content acquisition. “We tend to find it’s not like one set of titles does well in America and not overseas. … We think we can tell global stories that will resonate the same.”
That ambition is not, of course, unique to Netflix. “Studios have been ‘programming globally’ since their inception. They’ve been thinking globally since the end of World War I,” says Jennifer Holt, an associate professor of film and media studies at UCSB. “It’s not a new idea.” What might be new, though, or at least to Netflix’s current advantage, is that a dedicated streaming service faces far fewer limitations. “Studios had a finite number of screens,” says Holt. “Netflix doesn’t.”
The opportunity this affords Netflix is that rather than focusing on a few potential worldwide blockbusters a year, it can churn out a near-infinite variety of programs and films to see what sticks. You can see that intent reflected in the sheer scope of its home-grown efforts. It will release 31 new and returning original series, two dozen feature films and documentaries, and 30 original children’s series this year alone. Crucially, every one of those programs will be available “at the same time to members everywhere.”
“Netflix is trying to be international in the same way as the big movie studios, but it fills in niches that those studios aren’t,” says Matt Jordan, associate professor of media studies at Penn State.
Some of those gaps are filled by lowest common denominator fare, like the four-film Sandler deal, or schlocky oddities like Hemlock Grove, and others by critical darlings like Narcos and Beasts of No Nation. What may be most exciting is that these productions aren’t just quality-agnostic. They can also create new international avenues of influence.
“American films have influenced other cultures for a long time, clearly, and as Netflix helps bring international work to an American audience, the influence now can run the other way,” says Grant McCracken, a cultural anthropologist who has worked directly with Netflix and several other brands. “Not that Netflix is the only player here, but the deep Netflix catalog really opens up possibilities that the local art house cinema couldn’t hope to deliver.”
Ultimately for Netflix, what’s important isn’t where a show comes from, or even that it’s particularly good. What’s important is that it attracts and retains new users in 190 countries.
“They don’t have to be a boutique prestige producer or a studio that can appeal to the masses,” says Holt. “They can be anything, and everything.”
By tripling the number of markets in which it operates, Netflix will also dramatically broaden the range of people to which its originals must appeal. It also, though, gives each of those originals a better chance to captivate a crowd. “Even Netflix’s less popular original shows have had decent audiences, but the good news is that Netflix now has a massive global audience to show this programming to,” says Dawson. “even the less popular stuff can still receive a fairly significant audience across all those 190 countries put together.”
All of which could result in some exciting cross-pollination—will streaming help Bollywood finally find a US fanbase?—or it could mean more racially charged train wrecks from ’90s comedians. Or both. Only time, and the data, will tell.
But mostly the data.
Under the Hood
The rapid globalization of Netflix will also have effects that you won’t necessarily see. Whereas a year ago the company touted its fancy-TV, HDR preparedness, this year Hunt focused on the other end of the spectrum. “We’re beginning to focus our attention much more on mobile,” says Hunt, which is how customers in markets like India predominantly consume his product. “You’ll see more innovation in the UI on mobile going forward.”
Additionally, while most next-generation video codecs focus on 4K streaming, Hunt says Netflix has also prioritized a video format that helps with efficiency “at the low end.” He sees a viable low-resolution, low-bandwidth solution as still two or three years away, but it’s a serious enough goal that last fall Netflix formed the Alliance for Open Media, along with industry heavyweights like Google, Intel, Microsoft, and streaming rival Amazon.
Netflix’s truly international expansion, then, has had the same impact on its tech as it has on its interface and its content: a little bit of everything, informed by the needs of everyone.
Pleasing all of the people all of the time has never been a viable content model. Then again, no one’s ever had near-infinite chances to get it right.
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