Invention often springs from unsolved problems in our own lives. For Reed Hastings, that invention famously came off the back of a $40 dollar Blockbuster late fee for Apollo 13. Annoyed, Hastings together with his Netflix co-founder Marc Randolph, decided they should make movie rental easier. In the end, they did far more than that. Trips to Blockbuster were replaced by DVDs in mailboxes. DVD-by-mail was replaced by broadband-based video subscriptions. Licenced shows became original content. By changing consumption habits, Netflix rewrote the entertainment industry’s business plan, and ever since, the streaming platform’s stellar growth has been premised on redefining how content is distributed and consumed.

How Netflix looks to global audiences to grow business

Now it faces competition from the very giants that waited far too long on the sidelines. So what will Netflix do next? The same as it always has – question and challenge the assumptions that drive content today. This time around, it intends to rapidly gain subscribers in new markets by challenging preconceived notions around dubbing and subtitling preferences. In doing so, it stands to redefine how the world consumes content yet again.

Source: Business Insider.com

Being unconventional is the only Netflix convention

Netflix’s unconventional approach to international expansion is the logical progression for a company that has always challenged the viewing experience status quo. It untethered viewers from traditional cable programming times (and freed Netflix from limited prime time audiences), the hassle of in-store pickup and time-constrained consumption. By dropping full seasons at once, and through multi-platform accessibility, it created binge-watching and the ability to watch anywhere, even in low bandwidth areas. These phenomena changed consumer behavior: the audience didn’t necessarily need to be drawn in by critically acclaimed shows, when it was hooked on content gripping, funny or entertaining enough to consume in a single four-hour burst or at any available moment during the day.

You can argue with the data 

If these are the innovations that changed consumer behavior, Netflix’s use of data refigured what an entertainment provider could do. And it’s this that has enabled Netflix to make bold decisions when it comes to viewers’ global language preferences. Take, for example, its recommendation algorithm which accounts for 80% of Netflix’s watched TV shows. This means Netflix doesn’t have to rely solely on marketing to get subscribers to watch its content. Viewers also spend less time deliberating over what to watch; more time watching likely means less chance of subscription churn (useful when trying to acquire new subscribers in new regions). By capturing consumers’ real preferences and building its offering around them, Netflix behaves more like a tech company; data tells Netflix what consumers want, but it also lets the company create options viewers didn’t even know they wanted in the first place. As is the case with its disruptive approach to localization that is so crucial to the success of its international expansion.

Source: Netflix

Historically, it was assumed that certain countries, like France and Germany, were more likely to embrace dubbing. These preferences were rooted in how wealthy and protectionist countries were post World War II, but Netflix found these widely accepted theories to inhibit its expansion strategy. So it ignored them. And dubbed into languages with the greatest growth potential. It also disproved the widely held theory of English-speaking apprehension to English dubbing in foreign-produced films. When Netflix conducted in-person interviews, American subscribers communicated an overwhelming preference for watching foreign originals with English subtitles. However, with its underreported AB test, Netflix demonstrated that, in fact, viewers who opened the dubbed version of foreign-produced titles, Marseille in the case of the test, were more likely to finish the series, as compared to those who defaulted to the subtitled version.

Netflix continues to grow its language offering 

Ignoring historical biases, Netflix has steadily grown its language offering — it now has 31 dubbed languages and 19 subtitled languages available in its toolkit. What this means for consumers is that as well as choosing what they watch, they can choose how they watch it. Like Netflix’s Black Mirror: Bandersnatch, an interactive film in which viewers could define the show’s plot throughout, Netflix’s localized viewing options are not only plentiful but variegated – by show, by region, by preference. As it did with Ultimate Beatmaster back in 2017, Netflix continues to release content with localized versions for different countries (especially those with big growth opportunities and a dearth of competitors, unlike the US) to increase its potential subscribership globally. It’s also producing more original content in new markets, like Brazil’s 3%, or licensing more local shows, like India’s Mismatched that resonate both domestically and abroad. By challenging widely held assumptions on dubbing and subtitling, Netflix has appealed to new markets with locally produced content that also works for global audiences. If immediacy was Netflix’s unique selling point in the beginning, optionality is its principle point of difference now.

Source: Ampere Analysis

Traditional dubbing can no longer service demand alone

There’s no doubt that expanding internationally has meant that traditional dubbing studios have had to adapt to increased demand, induced by Netflix. Traditional dubbing was labor intensive and expensive, meaning quality output was the sole reserve of deep-pocketed studios. When the number of worldwide subscribers is integral to profitability, this just won’t do. Increased demand resulted in a consolidation of the dubbing industry and remote dubbing by the likes of Zoo Digital to help lower costs and improve turnaround times. That company saw revenues jump by 73% to $28.6m in July 2018 year-on-year. With language optionality essential to the international expansion that will ensure Netflix’s competitive advantage, dubbing studios can bank on demand only growing and will have to continue to streamline their services accordingly.

For content owners, with dubbing as the key to offsetting costs and increasing viewership, it becomes ever-more important to offer dubbed as well as subtitled versions of their content if they want to break through the overly saturated English speaking markets. The question is – what’s next for Netflix? Unlike Blockbuster, it’s best to pay attention.