Netflix Overseas Content Spend Set to Surpass U.S. for First Time

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Illustration: Variety VIP+; Adobe Stock

As the unprecedented output of peak TV finally contracts, the contours of the new television landscape are beginning to come into view. One major feature of this landscape: a lot more international TV.

A new forecast from Ampere Analysis projects that more than half of Netflix’s content spending this year — $7.9 billion of about $15.4 billion total — will go toward titles produced outside of North America. This means that, for the first time, the majority of the streamer’s budget will be spent on either localized original content for international markets or the licensing of internationally produced titles.

This is in line with broader trends in the TV industry as media companies rethink their content strategies for the post-peak TV era, as explored in the VIP+ special report “The Death of Peak TV.” According to a separate Ampere forecast, content spending in North America is expected to plunge more than 20% from 2022 levels over the next five years.

The reasons for this shift are twofold: First, international content can often be produced or acquired for much less than domestic productions (in part because of looser labor laws in other countries), while U.S. audiences in recent years have been more open to non-English-language content.

Korean series “Squid Game” remains the gold standard in this regard, becoming one of Netflix’s most watched titles ever with a budget of around $21 million — less than a tenth that of the reported production cost of “Stranger Things” Season 4.

Second, the maturity of the U.S. streaming market is also pushing streamers to invest more in local content for less saturated regions. As it becomes more and more difficult to add domestic SVOD subscribers, companies recognize that future growth will need to be fueled by emerging streaming markets, where established U.S.-based players have less dominance.

One such region is Sub-Saharan Africa, one of the few areas on Earth where the Big Red N faces serious competition. Another is India, a fast-growing economic and cultural force where Netflix has been spending aggressively to grow its subscriber base. It would not be surprising to see the next “Squid Game” come out of India in the next few years.

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