Decoding Netflix's Global Success: The Power of Localization
September 5, 2023
Can you believe that in 2010 Netflix was only available in the U.S.? Fast forward to today, and Netflix’s international streaming revenues exceed its domestic revenues—and their localization strategy is to thank for this remarkable success.
What Netflix did right was to understand its international audience and deliver content that would resonate with them. As a result, now it has more subscribers worldwide than all other pure streaming services combined!
Considering that it’s easier now than ever to reach international customers, every company has something to learn from Netflix’s localization strategy. So in this article, we’ll take a look at the factors that contributed to Netflix’s successful international expansion strategy and give you tips on how you can implement it in your business too. Without further ado, let’s start.
Netflix's Expansion Strategy: An Overview
Before we dive into the 4 key takeaways, let's take a moment to understand the journey Netflix took to reach its current global status as the most popular subscription video-on-demand service. Netflix's international strategy can be broadly divided into three phases, each with its unique approach to localization and market penetration.
Phase 1: U.S. Market Saturation and Initial International Entry
In its early years, Netflix focused on saturating the U.S. market, starting as a DVD-by-mail service and eventually transitioning to the streaming giant we know today. The first foray into international waters was in 2010 with a launch in Canada. This phase was primarily focused on English-speaking countries and developed markets, laying the foundation for what was to come.
Localization Tip: If you're just starting out, consider initially targeting markets that share similarities with your existing customer base. This allows you to test your localization strategy on a smaller scale before going all-in.
Phase 2: Accelerating Global Expansion
After solidifying its presence in Canada and other English-speaking markets, Netflix made a bold move to diversify its audience. This global expansion phase saw the company venturing into non-English-speaking countries across Europe, Latin America, and Asia. Netflix invested in localizing its platform by adding multiple languages and even initiated the production of local original content.
Localization Tip: As you expand, invest in comprehensive localization, not just translation. Understand the cultural nuances, consumer behaviors, and local trends to make your product or service resonate with the new audience.
Phase 3: Deepening Market Penetration and Local Partnerships
Once Netflix had a foothold in numerous countries, the focus shifted towards deepening its market penetration. This involved refining local strategies and creating content that resonated with regional tastes. Netflix also formed strategic partnerships with local telecom and cable companies to offer bundled services.
Localization Tip: Once established in a new market, focus on deepening your connections with the local audience through partnerships and hyper-local content.
4 Things to Learn From Netflix’s Localization Strategy
In the sections that follow, we'll distill this strategy into 4 key lessons. From pacing your foreign market entry strategy to nailing language and design, these insights offer a roadmap for any business looking to expand internationally.
1. Take Things Slow
Although Netflix seems to achieve international success rapidly, it actually started slow and avoided a mistake many businesses make when going global—which is to aim too high too soon. However, globalization is a comprehensive process and each step should be taken mindfully.
For Netflix, the start of international expansion was in 2010 to Canada. This was a strategic move as it’s geographically close to the US and the two countries share many similarities. This way, Netflix was able to learn what to consider and it developed a localization strategy in a less challenging environment.
After this initial expansion, Netflix always kept on learning and improving its localization strategy with each new market. This later resulted in remarkable success even in culturally distinct countries such as India and Japan.
These markets are particularly challenging for the video-on-demand industry as there are many local competitors and precise cultural preferences. However, Netflix was up to the challenge and put in the work that was required to truly localize for these markets. In fact, Japan now has the most extensive library of Netflix titles, surpassing even the US!
And the lesson here is to start slow and choose a market that will make the process of globalization manageable. Therefore, it’s smart to choose a geographically close country with cultural similarities to avoid unnecessary struggles as you’re learning how to operate in a brand-new environment. Once you improve your localization capabilities, successfully expanding into even the most challenging markets will be achievable.
2. Put Language First
Although translation is only one aspect of localization, it’s also a fundamental one. Without being fully understandable by your audience, you stand no chance of succeeding in any international market.
So it’s no surprise that Netflix always provides subtitles and dubs but it also makes sure that other aspects of its service, such as the interface and customer support, are available in the target language. Thanks to this seamless localization, Netflix has widened its subscriber base by nearly 50% in two years!
Moreover, Netflix also takes into account preferences when it comes to subtitles and dubs. For example in countries such as Japan, France, and Germany, Netflix is prioritizing dubbed content as these audiences are known to prefer dubbing rather than subtitles. To achieve the best localization results, Netflix also does A/B tests and experiments to maintain authenticity in tone and language.
“We think of subtitles and dubs as really enabling access to the story, and so our goal is to use creative intent to really create culturally relevant and resonant translations for the content so that it has a wide global appeal.”
Denny Sheehan, Director of Content Localisation and Quality Control at Netflix
To achieve high-quality subtitles for all the languages, Netflix launched the Hermes Portal and hired translators to manage the subtitles in-house. However, given that Netflix is specialized in technology and media, rather than in translation and localization, the project turned out to be time-consuming and eventually shut down.
It’s a mistake to underestimate the complexity and importance of high-quality translations and localization practices. This workload was too challenging even for a company like Netflix. Therefore, now they are relying on specialized third-party services to handle these tasks while they are focusing on their core business.
So it’s important to realize that language is crucial in any global strategy however, it shouldn’t take up too much of your time and distract you from working on your product/service. This is why it’s advisable to invest in a solution that can take up the translation workload and deliver you the best localization results while you work on your business.
3. Consider Transcreation
The initial Netflix model was to offer only pre-existing series and movies but producing original content is what took their localization strategy to the next level. Creating original content that really reflects the local culture allowed Netflix to attract foreign audiences and facilitate entry into new markets. In fact, in 2019, Netflix reported that the most popular titles throughout India, Korea, Japan, Turkey, Thailand, Sweden, and the United Kingdom were all local originals.
“In terms of programming strategy, where we are coming from is that a show has to feel true and authentic to the country it originates from. If we do a show in India it has to feel loved in that market first for it to have any strategic value for us.” Erik Barmack, vice president of international originals at Netflix
According to Erik Barmack, the goal for international originals is to “tap into new international audiences while also appealing to American Netflix viewers.” Currently, Netflix is producing original content in 17 different markets, and 45% of the total library Netflix has in the United States consists of foreign-language titles.
Some series like Lupin (France), Money Heist (Spain), and Sacred Games (India) became popular not only in their domestic markets but on Netflix platforms all over the world. Thanks to this strategy, the amount of Netflix subscribers in international locales increased by 98 million between 2019 and 2020, representing a 33% year-over-year growth.
Similarly, to make your product/service more attractive to foreign audiences, consider producing content that is specifically thought out for your target market. Unlike translation, transcreation requires reimagining the content for a target audience but it’s crucial to maintaining the existing tone, intent, and style. This allows businesses to appear more authentic in foreign markets while staying true to their international brand persona and performing better against local competition.
4. Don’t Forget About the Design
Localization isn’t just about words; it also takes into account aspects like layout and design. One challenge Netflix faced when translating its interface and content was text expansion as the same message can take up different amounts of space in different languages leading to unexpected design issues — especially in languages like German, Hebrew, Polish, Finnish, and Portuguese.
This is problematic as it can disrupt the user experience in foreign versions of Netflix. And adjusting the text to fit the design doesn’t always provide a solution as it could end up degrading the content. To address this, Netflix came up with a solution called “pseudo localization” that allows designers to see how the text is likely to appear once it’s translated.
This way designers can see the amount of space the new content in the target language will take up and test the design for translation-related expansion prior to facing any problems. However not every company has the resources to build its own tool to prevent this issue.
That’s why we developed the Visual Editor at Weglot which allows you to see and edit your translations on a live preview of your website and make adjustments if needed. This is especially important to offer seamless user experiences in non-Latin script languages (Greek, Arabic, Bengali, etc.) and languages with opposite script directions (RTL or LTR).
Also what about visual elements like movie thumbnails? Netflix is using personalized images to promote the same movie or series to different users based on their viewing habits. A blog post by the company explains this strategy through the example of the movie “Good Will Hunting.”
In this case, if a user is mostly watching romantic movies, they’ll be shown an image of the main character and his love interest in the thumbnail. However, if a user is mostly watching comedy movies, they’ll be shown the thumbnail displaying the character played by Robin Williams – who was a well-known comedy actor.
This practice of displaying personalized images is also a very effective strategy for localization. Using visual elements that will feel more familiar to the viewer will increase their likelihood of engaging with the content.
Therefore, when translating your website, don’t forget to localize your media elements as well as the text. And since displaying different images for translated pages can be technically complicated, using a translation solution like Weglot that allows you to translate media elements will come in handy.
Your Blueprint for Global Success
As you can see, localization is a big contributor to the success of big international companies like Netflix. No matter the industry or size, adjusting your content and offering to accompany international audiences is a strategy that is sure to pay off and get you ahead of the competition.
By translating your website with Weglot in minutes, you too can start taking advantage of international markets. Intrigued to know more? Get in touch and see how Weglot can help.
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