Too Much TV: Your TV Talking Points For Monday, February 6th, 2023

The case for global streaming production

Here's everything you need to know about the world of television for Monday, February 6th, 2023.

THE CASE FOR GLOBAL PRODUCTIONS
The Entertainment Strategy Guy has another look at the increase in global productions and as you might suspect if you follow his Substack (or his writing at places like The Ankler), he's not a big fan of the trend:

Similar to my warnings, over the years, that streaming (especially with exclusive, non-theatrically-released films and binge-released TV shows) wasn’t a great business model (which everyone else figured out last year) or my fears about streaming killing movie theaters (more on this soon), I feel the same way about Hollywood’s global push; the data just isn’t there.

And yet nearly every streamer is leaning heavily into this strategy. Group think is bad; it’s worse when people are copying strategies that haven’t even proven themselves to be successful yet.

I don't want to spend much time on his piece, because he and I continue to really disagree about this topic. You should still read the piece, because ESG does a great job parsing what public data is available and it's a point of view that has a lot of validity.

But.

I will make one quick point. He mentions the Netflix original movie Troll and how the Nordic-made film did very well globally. And he compliments the film's key art and trailer and writes that he was tempted to watch it, until he saw the film's terrible IMDb scores.

And this is a perfect example of why I disagree with his belief that IMDb numbers are a useful proxy for popularity or quality. I've seen a LOT of these global productions and my experience is that the IMDb score is very noisy, for a number of reasons too complex to go into here.

As it turns out, I saw Troll (and reviewed it at the time). As a matter of fact, I actively tracked down a screener from Netflix's Nordic PR people because it felt like a film that might be worth covering. And based on my experience with Netflix, I also knew there wasn't going to be much coverage of the film in English-language markets until it premiered. So the decision was driven both my content reasons ("I think I might enjoy this") and business considerations ("If I cover something before other people, I can make money!"). 

So was the film the creative disaster the IMDb score implies? Well, as Variety noted in mid-December, the film had a 90 percent "fresh" score on Rotten Tomatoes. And while the RT score is as noisy (if not more so) than IMDb, it certainly offers up an interesting counterpoint. And FWIW, I thought it was a fun, action film that managed to stretch its apparently modest budget to the max.

There were a lot of reasons for Netflix to greenlight Troll and many of them explain a lot about why the major streamers are expanding their global production. It's not group-think or following bad strategies. It's the streaming industry equivalent of "Money Ball." Looking at the challenges you face and making decisions based on optimizing as many factors as possible.

Whether you're Netflix, Prime Video, Disney+/Hotstar or HBO Max, you're faced with a couple of challenges that don't have any easy answer. You're either near or rapidly approaching the point where all of the easy (and not so easy) subscriber growth is over in most mature, English-language markets. Sure, you can probably still continue to make incremental subscriber gains, but these are the subscribers least committed to your product. The customer acquisition costs are higher and so is the churn in this group.

Assuming you aren't happy just being a mostly-English language streamer with slowing growth, you need to look globally. Now it's true that English-language content travels well globally, but there are some huge caveats. Action and dramas do better than comedies. And no matter where you are, a lot of the projects tend to be star-driven. And to complicate matters, while you ramp up production in other territories, you still need to keep spending on expensive English-language projects to retain current subscribers.

And global producing has its own set of challenges. As ESG notes, viewers tend to gravitate towards locally or regionally-produced content. And the type of content that does well in India might not travel well in Spain or South Africa. Much less in the United States. 

So if you're a streamer like Netflix, how do you balance all of these factors? Obviously, a Squid Games-style global hit is always a goal. But you also know that no matter what the language, those global hits are rare and you can't count on them. 

There are a few ways you can hedge your bets. Despite what some critics argue, various local production mandates and other revenue-sharing guidelines are a factor. They aren't enough to justify greenlighting a project, but they are a consideration. Another factor is hiring people who have name recognition locally (or regionally). And by using the combination of mandated production funds, lower production costs and other incentives, cranking up global production starts to make sense. If you have a global hit, fine. But if you're careful, you can produce smaller regional titles that aren't expensive, travel across a number of countries and give you originals created and starring people whose careers are likely to be long and noteworthy.

Let's circle back to Troll. Filmmaker Roar Uthaug is no stranger to action-adventure pictures, having previously directed the 2018’s Tomb Raider reboot. But more importantly, he also directed the 2015 disaster movie The Wave. That Norwegian theatrical film costs $6 million and had a $13 billion box office, primarily in Norway and Europe. But the film cycled through Netflix and several other streamers and built a lot of buzz with fans of action/disaster films.

So Uthaug is a known entity in the Nordics and Europe, an area where Netflix is in a very competitive battle with not just other American streamers but with regional powerhouses like Viaplay. Troll cast several well-known Nordic actors and was able to take advantage of local production credits and well-trained local trades. And while the budget on the film has never been publicly announced, based on reporting I read from Norway, it appears to be somewhere on the $20 million USD range.

With all of those factors, it's nice for Netflix that Troll was a global success, but it would have likely hit the streamer's internal metrics for success based on the other factors.

You'll see similar calculations taking place across the globe. Prime Video, Disney and Netflix are all pouring money into South Korean productions because South Korean titles tend to travel well across much of APAC. And thanks to substantial government incentives, South Korean productions are booming. And that allows American streamers to license global deals for shows and movies that they have an exclusive on outside of South Korea. It keeps their costs down and gives them access to some of the country's top talent. Talent that is also a known quantity across much of the Asian-Pacific region.

And while it doesn't get a lot of attention in the U.S., it's becoming more common for American streamers to develop a project in one country, then remake the IP in a variety of other territories. Not only does that lessen development costs, but it helps with marketing and allows the streamer to offer up several takes on a common title. This is not rocket science, BTW. Studios such as Sony TV have been doing this for years and they do it not because of group think or because they are chasing Netflix. It's because when you do it well, producing globally, mixing local productions with regional and globally popular titles can be a very lucrative approach.

There's a reasonable argument to be made that the quality of Netflix's (or Prime Video's) global productions could be better overall. But that's not the same as arguing that increasing global production is a bad idea. 

If you’re interested in the global production scene, may I recommend that you subscribe to my free M-F “10 Stories You Should Know” newsletter?

And one last side note. If you work at one of these American streamers, PLEASE make it easier to cover these global titles here in America. If you're going to spend the money producing them, why not maximize your return and try a build a bit of buzz in the U.S.? 

ODDS AND SODS
* According to CBS, Sunday night's Grammys broadcast was watched by 12.4 million viewers, up 30% from last year, best since 2020. Largest live streaming audience in show history across Paramount+ and CBS streaming platforms.

* In the category of "no one really wants this,"  Kenya Barris has written a remake of White Men Can't Jump, which debuts Friday, May 19th on Hulu.

* The Grammys are built on a delusion. Even the highlights of last night's ceremony couldn't fully distract from its problems.

WHAT'S NEW FOR MONDAY:

Bloodlands Season Premiere (Acorn TV)
C.B. Strike: Troubled Blood (HBO)
Independent Lens: Outta The Muck (PBS)
The Madame Blanc Mysteries Series Premiere (Acorn TV)
Work It Out, Wombats! Series Premiere (PBS Kids)

Click Here to see the list of all of the upcoming premiere dates for the next few months.

SEE YOU TUESDAY!

If you have any feedback, send it along to Rick@AllYourScreens.com and follow me on Twitter @aysrick.