Author | Huang Yilin
Since the first season, the popularity of "Kingdom" has not only stayed in Asia, but also spread to the European and American markets, setting off a global movie-watching craze. The second season coincided with the complete collapse of the film industry during the epidemic, and the war broke out on the streaming media battlefield. Netflix, which has the largest number of users in the world, firmly established itself as the industry hegemon. Although the current success of "Kingdom" is partly due to opportunities, it should be attributed more to the creative thinking of Netflix's original series: how to use local thinking to create global original series. The acquisition of this method comes from the experience accumulated in the Asian market for five years.
Episode reviews of "Kingdom" Season 2 on IMDb
The triple dilemma in the Asian market: competitors, piracy, and network speed
There are no ads on the Netflix page, and all revenue comes from subscription fees. As of 2019, they have approximately 52 million subscribers in North America and are about to reach their market cap of 60 million. Starting in 2011, North American growth was extremely slow, and Netflix struggled to focus on gaining international market share, which was a strategic step it had to take. The Asian market, which has the greatest potential in the world, is the largest piece of cake. In 2015, Netflix began to actively expand its business in Asia. The total number of subscriptions in 2019 was 16 million, but this fertile land is still far from being developed.
Netflix’s biggest obstacle in Asia comes from streaming media competitors that are difficult to shake. South Korean streaming giant Viki has more than 40 million active users. In addition, Viki has entered the mainland Chinese market unimpeded. In Southeast Asia, HOOQ and iFLIX have long seized market share. Compared with Netflix’s monthly subscription fee of US$7.7, both prices are around US$2. The two local media also know the preferences of target users well, and use their advantages in producing local programs and distribution channels to counter the offensive of the giants. In India, Netflix's rivals are Spuul and Hotstar, which, in addition to low prices, also offer a large number of free options. For $2.30, Spuul unlocks its entire movie catalog and removes ads. In order to cope with this situation, Netflix launched differentiated pricing strategies in India and Malaysia, but with little success.
iFLIX is committed to creating the "Southeast Asian version of Netflix"
Netflix and these competitors also have two common enemies: the large number of free streaming media covering Asia, and the rampant piracy market. People can easily get the same high-quality content as Netflix at a low price or even for free. According to data provided by Microsoft , among the 166 personal computers randomly purchased in nine Asian countries, the computers purchased in South Korea, Malaysia, Vietnam and Thailand were equipped with pirated software, and the piracy rate reached 100%. India accounts for 91%, followed closely; Indonesia accounts for 90%, Taiwan accounts for 73%, Singapore accounts for 55%, and the Philippines accounts for 43%.
The third dilemma that affects Netflix's ability to eat the Asian cake is the difficulty of quickly solving the mobile broadband penetration rate. High-definition, coherent and smooth streaming media programs require high-speed broadband to transmit data. The situation is most optimistic in South Korea, where about 90% of citizens have access to fast broadband. Japan's broadband market penetration rate is also very high, with approximately 185 million mobile network users. In many Asian regions with underdeveloped networks, data caps for subscribers are also relatively low. Of Southeast Asia's 600 million people, only about 50 million have access to broadband services. Although India has 462 million internet users, only 35% of the total population enjoys unblocked internet speeds.
Netflix user growth chart from 2017 to 2019 (blue: North America, red: Europe, yellow: Latin America, green: Asia-Pacific)
Piracy and Internet speed are the collective dilemmas faced by all Asian streaming media, and Netflix is helpless. However, buying exclusive broadcast rights and developing original IP are the best weapons to restrain competitors. Although they have not entered the Chinese market, many domestic dramas such as "The Legend of Zhen Huan ", "Nirvana in Fire", "The Legend of Mi Yue", "Undocumented Crime", and "White Night" are all in Netflix's content library , attracting users from all over the world.
However, large-scale purchases in Asia are just a precautionary measure. Only by becoming a producer of high-quality original IP can we truly expand the scope of our strategy, and it is the most effective weapon to defeat powerful enemies.When "Kingdom," a period Korean drama featuring zombies and Machiavellian plots, received rave reviews, many other loyal users of Asian streaming media had to download Netflix and willingly pay the subscription fee.
Netflix's "White Night" page
Three recipes for original Asian IP: original flavor, industry, and luxury
At the end of December 2019, Netflix had more than 16 million paying users in the Asia-Pacific region, much higher than the 6.5 million in 2017 and 2018. 10.6 million. Judging from the number and trends of user growth in the past two years, Netflix is likely to be the biggest winner in Asia. The current impressive achievements are closely related to the development of original IP. In November 2019, Netflix CEO Reed Hastings said that since Netflix launched its service in the Asia-Pacific region, more than 180 works have been tailored for Asian audiences. In 2020, there are still 64 original Asian dramas waiting to be released.
uses excellent local production teams and gives them a high degree of creative freedom. This is the creative purpose of Netflix's original dramas. The resulting results are a win-win situation. This not only caters to the local audience, but also adheres to the principle of "the more national it is, the more global it is". The more distinct the local Asian culture is, the more it will be accepted by global users.
From the first Asian original Japanese drama "Underwear" in 2017 to now, with the expansion of the Asian market, the types and themes of Netflix's original dramas have become increasingly diverse. So far, local original dramas have been launched in 13 Asian countries and regions. set. Analyzing the uniqueness of each country and region and then following specific genres is the business planning idea for Netflix's original dramas.
Japan is the Asian country with the largest number of Netflix users, and it is also the country where Netflix was first launched. But in Japan, compared to dramas, animation dominates the world. In 2020, Netflix’s strategy in Japan is to fully focus on animation, mainly focusing on remakes of classic IP and original sci-fi animations.
Netflix's original Japanese animation series team
relies on Bollywood to cultivate a large number of movie viewers. India now has a population of 1.324 billion. India is an ideal market for Netflix. In 2019, Netflix launched 18 original dramas in India, and its production increased to 33 in 2020, spending US$420 million. These projects delve deeply into Indian social issues and have gained strong emotional resonance from a large number of local audiences. "Delhi Crime" is adapted from the 2012 bus gang rape case, and "Sacred Games" reveals the unknown secret network of crime, treason and corruption behind the economic revival. However, Netflix’s self-produced Indian dramas can only meet domestic demand and are difficult to enter the international market. This is the main reason why Netflix’s investment in Indian dramas is not very high.
Taiwanese drama is Netflix’s initial attempt to open up the entire Chinese-speaking world. The Taiwanese market has a Chinese cultural background and does not have many restrictions on subject matter. However, the "Chinese Trilogy" launched in the past two years is not satisfactory. "Marriage on the Other Side" is a "Mary Sue" drama under the guise of suspense; " Sinner " is full of 18+ forbidden elements such as foul language, nudity, and shopping, and has been criticized by netizens without limit; "The Ultimate Daughter" "Out of touch with the times, no one pays for outdated idol dramas. The failure of Netflix's original dramas in Taiwan lies in its over-reliance on using big data to determine themes. However, the tastes of the audience in this country do not include big data keywords, and should be more topical and realistic.
In 2020, Netflix accurately positioned the suspense and reasoning " Who is the Victim ", adapted from the work "The Fourth Victim" by the online mystery novelist "The World is Infinite"
(Xu Ruiliang)
. In addition to original dramas, Netflix also launched the large-scale outdoor reality program " Travels " in collaboration with Jay Chou, demonstrating Netflix's determination to make a comeback in the Chinese market.
In Thailand, where horror films are world-renowned, the 2019 "Island" focuses on suspense and horror, and also uses this to write about the living conditions of transgender people. The second Thai drama "The Nightmare" will be launched this year. It combines suspense, horror, youth, growth, and love elements to tell the story of five teenagers who are haunted by ghosts from the past.
Working photos of "Island"
After quickly understanding the local creative themes and cooperation processes, Netflix strictly required original dramas according to the standards of the Hollywood industry, and all dramas must have the quality of a movie. On average, each episode of "Kingdom" arranges at least 15 minutes of intense zombie fighting. The viewing pleasure brought by strong sensory stimulation comes from Netflix's strong technical support. As a company supported by technology, Netflix continues to meet the highest standards in terms of technical indicators, and 4K, HDR, Dolby Vision, and Dolby Atmos are indispensable. Kim Sung-hoon, the director of "Kingdom", mentioned Netflix's high requirements for post-production in an interview with Korean media: "Although I am not very clear about some professional terms, most movies are produced in 2K, and only high-quality production can Only when CG We will work in 4K, but this time we are all using 4K, which consumes 2 to 3 times the effort. "Even for small and medium-sized movies such as "Fireworks", "Island" and "The Ultimate Daughter", which are used to enrich the inventory. Project, Netflix also requires the technical team to work carefully.
"Kingdom" press conference scene.
Netflix strives to achieve high standards in the technical field, which requires huge wealth to support it. Unlike current top competitor Disney’s expansion strategy of constantly gobbling up peers, Netflix spends most of its financial expenditure on producing original content. Subscription revenue in 2019 was US$15 billion, and the cost of investing in original content was US$8 billion. The single-season salary of "The Naked Director" is 1 billion yen. The first season has 10 episodes. The production cost of a single episode is 100 million yen, which is equivalent to about 64 million yuan, which is ten times the production cost of a single episode of Japanese TV series. One episode of "Kingdom" cost US$2.83 million, equivalent to 20 million yuan, ranking third on the list of the highest investments in Korean drama history.
There are huge differences in consumption levels in each Asian country. There is reason to doubt whether Netflix's huge investment in original dramas can generate subscription revenue that exceeds the cost. Perhaps, we still need to wait for more hits like "Kingdom".
Three major advantages of deeply cultivating Korean dramas: Korean Wave, diversity, and multi-party cooperation
Currently, "Kingdom" is the largest IP developed by Netflix in the Asian market. Judging from the number of unsolved mysteries buried in the second season, this IP has already conditions for long-term development. The creator revealed that it is conservatively estimated that in the next three years, Netflix will take advantage of the trend to build the "Kingdom" universe, and may even use the word "epic". Netflix only officially entered South Korea in 2016, one year later than Japan. In the past three years, Netflix has learned a lot about the Korean market, making it the most fertile ground for Netflix in the Asian market.
This has something to do with the global influence of Hallyu. In the 1990s, Hallyu officially swept through Asian countries, starting from the 1.0 era of Korean dramas, to the 2.0 era focusing on K-POP, and then to the 3.0 era of Korean dramas, and has fully conquered European and American countries. Since Moon Jae-in came to power, Korean popular culture has become a “diplomatic business card” representing South Korea. As of December 2019, there are as many as 95 million Hallyu fans around the world. There are 1,843 fan clubs around the world with 89.19 million members, even covering Arab countries and Africa. South Korea’s idol industry is mature enough, and it would be a wise move for Netflix to expand the market based on this unique advantage.
Korean dramas have always been victorious in the Asian market as the pioneers of the Korean Wave. Netflix started by purchasing local copyrights and then exclusively distributing them. From 2016 to 2018, several traditional Korean TV media tvN, CJ EM, and JTBC all refused to publish them. The first broadcast is sold to Netflix, and the cooperation model is that Netflix is not allowed to go online one month after the TV station broadcasts. Until 2018, several TV media all began to open fast windows to Netflix. The launch of " Spring Night ", "Mr. Sunshine", and " Sky City " on Netflix was shortened from one month after the TV station was broadcast to one Hour. In fact, these movies are all co-production projects between Netflix and TV stations. In order to grab viewers, Netflix can only spend as much as possible on the production costs, with its investment accounting for as much as three-quarters.
Netflix’s first self-produced Korean drama in 2017 was the costume time-travel drama "My Only Love Song". This drama encountered Waterloo as soon as it was aired; the exquisite production level and service style could not save the routine script and the lack of sense of CP. Heroine and heroine.Until 2019, Netflix changed its strategy on original Korean dramas. After a clear understanding of its own positioning, it decided to focus on content innovation and quality improvement. The three films released in 2019 are low-cost but of high quality. "Personality Quartet" has four characters played by Li Zhien alone, and the four short films were shot by different directors. Two romantic dramas, "Because First Love Is the First Time" and "Ring the Bell If You Like It" have also gained good reputations. They go beyond the ordinary "Mary Sue" sweet dramas and touch on reality in addition to their clever narrative techniques. dimensions.
"Quartet" poster
However, the above are not uncommon types in the Korean mainstream market. Netflix's real innovation in the theme of original Korean dramas in 2019 is "Kingdom". The organic combination of the power struggle of the ancient Korean dynasty and the popular zombie elements is a genre that has never been seen on the market. At the same time, in order to ensure quality, the team is also equipped with top domestic players, including "Tunnel" director Kim Sung-hoon and "Signal" screenwriter Kim Eun-hee, as well as internationally renowned actress Bae Doo-na; at the end of the second season, It was revealed that Jun Ji-hyun will join the show in the third season. With a strong team-up, creative and technical achievements, this Korean drama is finally no longer a romantic idol drama, and has gained a place in the international scene.
The growth of Netflix users in South Korea is also closely related to partners in various fields. When it first entered the Korean market in 2017, it negotiated a large order with LG Plus, a local mobile operator in South Korea, and relied on bundled packages to attract 200,000 to 300,000 user registrations per quarter. In November last year, Netflix reached a cooperation agreement with CJ EM, the production and distribution company of "Parasite". The two parties signed a three-year content production and broadcast agreement starting in 2020. In February this year, Netflix reached an in-depth cooperation with Samsung Electronics. Netflix is present in both content and system. For example, a Netflix button is directly added to the TV remote control, and the Netflix APP comes with the mobile phone.
Netflix cooperates with TV brands to add Netflix buttons on remote controls
Netflix’s penetration in the Korean market has triggered strong dissatisfaction among some Korean media group entertainment companies. Several TV media KBS, SBS, and MBC have joined forces to win back users from Netflix. However, they cannot match it in terms of funds, and it is even less possible for them to continuously shoot big IPs that compete with "Kingdom". If it returns to the state before Netflix entered the market, South Korea's local streaming media monopoly market will not be conducive to the spread of Korean dramas internationally.
For Netflix original dramas, 2020 is a year full of opportunities: Will there be big IPs like "Kingdom" in other parts of Asia? Will Netflix’s biggest competitor, Disney’s streaming service Disney+, start plans to launch original dramas in other regions? Can we continue to produce high-quality original dramas and recover the huge costs? What impact will the new coronavirus that has swept the world eventually have on Netflix? These unresolved issues will affect Netflix's future trends.
author丨Huang Yilin
editor丨Yu Yaqin, Li Yang
proofread丨Liu Jun
