Netflix data shows Asia content key for U.S. streaming services

Leading U.S. streaming services are spending heavily to win over Asian viewers. Disney plans to produce 50 original Asian films and television series by 2023, while Amazon is buying locally produced content.

Viewership data from Netflix, another U.S. streaming company, highlights the trend toward local fare among content providers, which until recently promoted mostly Hollywood offerings.

“We have built and continue to expand our production teams in each of our core markets where we will be producing content in the region,” Luke Kang, president of Disney’s Asia-Pacific unit, said in an interview with Nikkei.

He added that local teams decide what to produce and how, referring to the company’s plan to release 50 or so titles over the next 18 months through Disney+.

Disney has been promoting blockbuster U.S. movies such as “Star Wars” and the Marvel franchise to attract subscribers since it jumped into the streaming market a little more than two years ago. But the new Asian strategy adopted by Kang breaks from its previous marketing efforts.

Earlier in December, Amazon announced that it will begin production and content procurement next year in Southeast Asian nations such as Thailand, the Philippines, Indonesia and Singapore for its Prime Video streaming service.

Data from Netflix, which makes shows in 45 countries, again offers a clue as to why streamers are going local. In November, the company said it would release weekly “Top 10 on Netflix” lists of its most popular TV series and films, globally and for specific countries. Though limited to the most popular content, the data reveals which titles are most widely seen by its viewers.

Nikkei analyzed the Netflix data for the 24 weeks from June 28 through Dec. 12. On the assumption that titles which made the top 10 list in each country or region for five weeks or more were “continuously watched,” Nikkei verified where they were produced using information from IMDb, an American database of films, TV series and other video products.

The 13 titles analyzed in the U.S. market revealed that all but “Squid Game” were locally produced dramas or animated shows. In Japan, South Korean dramas and Japanese animated shows were widely viewed, with “Crash Landing on You” making the list for the entire period surveyed. South Korean dramas were also popular in Thailand, splitting the list with locally produced titles.

In contrast to European viewers, those in Asia appear to prefer content made in their own region. Titles produced outside the U.S. accounted for just 20% of the most popular shows in Britain and 31% in France. On the other hand, no U.S.-made content was on the Netflix list for five weeks or more during the 24-week period in Japan, South Korea or Thailand.

Although the first season of “The Good Doctor,” an American TV series, made the list for seven weeks in Indonesia, most other popular content came from Asian countries such as South Korea.

Noting that viewing trends in Asia reflect linguistic and cultural differences with the U.S., Kang said Asian viewers want content they can relate to.

Netflix, which began stepping up its investment in Asian content around 2015, had 30 million subscribers in the Asia-Pacific region as of the end of September, up nearly 30% from a year earlier and greatly contributing to the recent growth of its customer base. Revenue from the region accounted for more than 10% of the company’s total revenue in the first nine months of this year.

Asian content is also beginning to draw viewers around the world. “Squid Game,” a South Korean survival drama that became a global blockbuster, was watched for more than 1.65 billion hours in the first 28 days after its release, revealing a pattern.

The drama was the most watched title in eight Asian markets, including South Korea, Vietnam and Hong Kong, in the first week of streaming. Subsequently it became widely known elsewhere through social media and Netflix’s viewer recommendation system. It reached top of viewer rankings in the U.S. and France in the second week and reached that position in more than 90 markets, including Italy and Russia, the following week.

“All of the things that have worked for us globally have been very authentically local, including ‘Squid Game,’ which has got a very Korean aesthetic. It’s a show that played incredibly well in Korea and then traveled around the world. And it’s not specifically a Korean phenomenon,” said Ted Sarandos, co-CEO of Netflix.

“Hellbound,” a dark South Korean fantasy series, began streaming in November and later won a global following after drawing eyeballs in Asia, although it was less of a hit than “Squid Game.”

The growing investment in Asia by U.S. streaming services is causing ripples for Japanese broadcasters as well. With the streamers spending three to four times as much produce dramas as big commercial TV networks in Japan, they may attract more viewers and accelerate the trend away from conventional TV watching in Japan, especially among young people.

Some Japanese broadcasters are teaming up with the streaming services. “Japan Sinks: People of Hope,” a drama series premiered by Tokyo Broadcasting System in October, is offered on Netflix three hours after the end of each TV episode. In December, TBS also began showing “Mirai Nikki” (“Future Diary”), a reality series based on past variety shows, via Netflix.

The collaboration between TBS and Netflix is in line with efforts by leading Japanese TV networks to become global providers of dramas and other content. The trick for the broadcasters will be to balance cooperation and competition with the streaming services to win a slice of their huge worldwide audiences. NIKKEI Asia