Everybody has a favorite Netflix series, be it Wednesday or The Crown. Over the past few years, this streaming network has revolutionized the entertainment industry by reaching over 260 million people worldwide with content.
But how did this Californian startup from Scotts Valley become the industry leader in streaming and a global success? In this guide, we are going to study how Netflix’s careful decision-making led to its success and what businesses, aiming to go global, can learn from it.
So, without stalling, let’s get started!
Netflix’s Careful Selection of International Markets
To reduce potential cultural and geographic obstacles, Netflix first selected its markets based on similar traits while expanding into new nations. This helped the streaming firm to overcome potential geographical and cultural challenges.
Canada – Unfurling the Maple Leaf Flag
Canada was one of the nations Netflix initially explored for its international expansion. They chose this market because of its close linguistic, cultural, and geographic resemblance to the US.
In September 2010, Netflix marked its entry into the Canadian market. They set the first subscription rate at $7.99 per month since they knew winning market share required competitive pricing. Within ten months, Netflix reached a million subscribers in Canada.
Canada turned out to be a wise decision for Netflix. It serves as an example of how picking a market that is comparable to your own can be a simple first step in your efforts to expand internationally.
Latin America & the Caribbean – Adios to Tacos and Hola
Expanding into Latin America and the Caribbean regions was a logical next step for Netflix after its successful expansion into Canada. These regions were geographically close to the US.
The company had about 23.6 million subscribers in the US and Canada at this time. If Netflix successfully entered the Latin American market, it would have gained access to more than 600 million prospective new members.
Upon declaring its global expansion into the area, Netflix’s stock price experienced an 8% increase, reaching all-time highs.
With content available in Spanish, English, and Portuguese, the company started expanding to 43 Latin American and Caribbean countries and territories in September 2011.
On September 5th, Brazil became the first nation in Latin America to launch the service. At roughly $9.10, the streaming service was more costly than in North America.
Following Brazil, Netflix launched its service in Argentina, Chile, Colombia, and Mexico. Over the weeks, the firm expanded into 38 more countries. The business collaborated with Showtime, Miramax, and CBS to provide regional programming.
Europe – From Hollywood Hills to Eiffel Tower
After the success of its above-mentioned regional expansion, Netflix moved to Europe in 2012. Following a highly successful expansion into the UK, one in ten British households had a Netflix subscription by 2014.
Netflix had a brilliant plan for its global expansion by carefully selecting content for new markets. In the UK, they began by reviewing the kinds of content that viewers appreciated after using programming from the BBC, Channel 4, and ITV to get some initial momentum.
Netflix Used Data Analytics and Localization In Its Favor
Netflix, not only relied on the careful selection of the market, it also used the power of localization and data analytics for more favorable results.
Use of Tailored Thumbnails
Netflix paid close attention to detail, even users’ reactions across different regions to the photos in the thumbnail.
If the thumbnail appealed to the viewer, they were far more inclined to view it. The adage “a picture is worth a thousand words” applied to Netflix, where the likelihood of sticking with the service increased with how much one viewed it.
Thus, Netflix cleverly created variations of thumbnails for every piece of content. After that, the Netflix algorithm analyzed users’ viewing preferences to set the most appropriate thumbnail.
For example, Netflix displayed a thumbnail for Stranger Things starring Winona Ryder and David Harbour if a user watched a lot of romantic comedies. Contrarily, it displayed a Stranger Things thumbnail featuring children dressed as Ghostbusters if someone was more inclined to watch comedy content.
Implementation of Personalization Algorithm
Netflix carefully chose which markets to enter and customized its content to appeal to specific geographic areas by leveraging data analytics.
The streaming firm comprehended customer behavior and preferences globally, thanks to its personalization algorithms. Their success depended on their ability to develop a content strategy specific to a market.
The company discovered that when it entered the Asian market, viewers were more likely to watch episodes with subtitles than dubbed ones. Latin American viewers, on the other hand, favored dubbed content. This information was crucial to Netflix’s global content localization strategy.
Leveraging Media Localization
Netflix wanted its content to be accessible to as many people as possible.
Thus, it localized foreign titles with English subtitles in English-speaking nations. Simultaneously, based on the local audience’s preferences, the firm chose to dub or subtitle content in other markets, such as France, Germany, Italy, Spain, and Japan.
Netflix India provided content in Bengali, Tamil, Telugu, Marathi, and Hindi. It offered a variety of Mandarin and Cantonese content in China.
Netflix has become a global phenomenon and a highly sought-after streaming service with the help of media localization.
Strategic Approach to Developing Original Content
In addition to localizing content, Netflix develops original content according to regional tastes. When Netflix started to operate in Japan, it identified many Japanese people were into anime. As a result, Netflix produced the wildly successful original anime series “Devilman Crybaby.”
Netflix started using this tactic of modifying regional content to aid in its concurrent global release more recently. For instance, Netflix paid close attention when the Korean film Parasite won the 2020 Oscar for Best Picture, becoming the first non-English film to do so. On the other hand, K-pop become a worldwide sensation.
With this insight, Netflix produced the Korean series Squid Game, which became an enormous global hit. Within six weeks of its premiere, Squid Game surpassed all previous Netflix original series in terms of viewership.
4 Things to Learn from Netflix’s Global Strategy
In this section, we will decode Netflix’s global success into four key takeaways. These insights provide a road map for any company aiming to grow globally, from timing your foreign market entry plan to perfecting language and design.
Don’t RUSH – Take Things Slow
Despite giving the impression of quick growth, Netflix’s expansion was slow. Besides, the streaming firm avoided common mistakes such as expanding too fast or aiming too high. Globalization is a multifaceted process, and businesses must work on each stage carefully.
Canada was the first country on Netflix’s international expansion map. This was a calculated move because it is strategically close to the US, and the two nations are very similar. In this approach, Netflix created a localization strategy in a less complicated setting and learned the factors that need to be considered.
Following this early success, Netflix continued to learn and refine its localization approach with every new region. This continuous learning approach led to extraordinary success even in culturally different nations like Japan and India.
The video-on-demand sector is particularly challenging in these regions because of the various local rivals and specific cultural preferences. But Netflix rose to the challenge and made the necessary investments for effective localization. As of now, Japan’s Netflix library is bigger than that of the US!
Takeaway
The lesson here is to begin cautiously and pick a market that enables control over the globalization process. Therefore, you should choose a nearby country with a similar culture, which will help minimize risks while adapting to a new environment. Once you have established a strong foundation in these regions and streamlined your localization strategy, you will be better equipped to enter the most challenging markets.
Understand the POWER of Language
Even though translation is just one component of localization, it is an essential one. In any global market, you have little hope of success if your target audience can’t understand you.
That’s why Netflix guarantees that other parts of its service, like the interface and customer service, are available in the target language in addition to providing dubbing and subtitles.
Additionally, Netflix considers user preferences for dubbing and subtitles. Besides, Netflix conducts A/B tests and experiments to retain authenticity in tone and language to obtain the best localization outcomes.
To achieve high-quality subtitles in every language, Netflix employed translators to oversee the subtitles internally and introduced the Hermes Portal. However, the effort proved time-consuming and was eventually abandoned because Netflix is more of a media and technology specialist than a translation and localization expert.
Underestimating the difficulty and significance of accurate translations and localization procedures was a mistake. As a result, to focus on their core business, they are now depending on specialist third-party media localization services.
Takeaway
Language is the key ingredient in any global strategy. However, it is equally important to ensure that translation and localization processes do not consume too much of your time and distract you from your core business. Therefore, invest in a reliable solution that can take up the translation workload and deliver high-quality localization results.
Put Transcreation to GOOD USE
When Netflix first launched, it only offered pre-existing TV shows and movies. However, their localization strategy took off when they began producing original content.
By creating content that truly reflected the local culture, Netflix was able to draw in foreign audiences and enter new markets.
In 2019, Netflix reported that their most popular titles in India, Korea, Japan, Turkey, Thailand, Sweden, and the UK were all locally produced originals.
Currently, Netflix is creating original content in 17 different markets, and foreign-language titles make up 45% of the platform’s entire library in the US.
Takeaway
It is important to create content tailored to specific markets rather than simply translating it to appeal to a global audience. This process is known as transcreation. It involves reimagining the content while maintaining its original tone, intent, and style.
By doing so, businesses can maintain their international brand identity while appearing more authentic in foreign markets and increasing their competitiveness against local players.
DON’T FORGET Design While Localizing
Localization involves more than just translating words. It also includes considering factors like layout and design. Netflix encountered a challenge while adapting its interface and content for different languages. The text expansion led to unexpected design issues, particularly in languages like German, Hebrew, Polish, Finnish, and Portuguese.
This can be a problem as it can disrupt the user experience in Netflix’s foreign versions. Adjusting the text to fit the design may not be a viable solution as it might degrade the content. Therefore, to address this issue, Netflix devised a solution called “pseudo localization.” It enables designers to preview how the translated text would appear and avoid any design issues.
Takeaway
For successful global expansion, you can’t ignore the design elements. Thus, focus on localizing the designs, layouts, and color schemes to resonate with the target audience’s preferences and cultural nuances.
Here’s How Limegreen Media Can Help You Replicate Netflix’s Global Success
Are you planning to expand your business internationally, like Netflix? Navigate cultural complexities and language barriers for seamless global success with Limegreen Media.
We have a global network of linguists & cultural experts leveraging cutting-edge technology & tools for streamlined processes. Besides, we have a proven track record of international success stories.
What Do We Offer?
- High-quality translation & transcreation by cultural experts.
- Professional dubbing & subtitling for diverse preferences.
- Multilingual content adaptation for optimal impact.
- Original content development reflecting local contexts.
- Localized content library curation for diverse audiences.
- Market-specific marketing & promotion for effective reach.
- Multilingual UI/UX design for intuitive experiences.
- Language support & compatibility for different systems.
- Localization testing & optimization for peak user experience.
Bottom Line
The reason to discuss this case study was to understand the strategy that led to Netflix’s global success. Let’s summarize what we have learned from it.
The first rule was, of course, to never jump into anything. Netflix gradually spread over the world, region by region. Before heading into Europe and Asia, they thrived in the US and Canadian markets.
When Netflix began to expand internationally, localization was its primary concern. These challenges included dubbing, substituting, and designing an interface specific to a region. Within a few years, they doubled their subscription base thanks to accurate translations and transcreations.
Additionally, Netflix added regional material and customized its lists based on user preferences. Many streaming services have replicated Netflix’s approach to translation, transcreation, localization, and user interface. It is a surefire way to succeed.
