Netflix Bets Big On Smallest Southeast Asian Market, Expands Local Content Production To Replicate 'Squid Game' Success

In a bid to replicate the success of its South Korean hit ‘Squid Game’, Netflix Inc. NFLX is boosting its local content production in Southeast Asia.

What Happened: Netflix is increasing its investment in original programming in Southeast Asia, particularly in Indonesia and Thailand, reported Bloomberg. The streaming giant is looking to capitalize on the region’s large, young demographic and its potential for substantial growth.

Netflix’s Vice President of Content for Asia, Minyoung Kim, announced the company’s plans to expand its content offerings and produce more shows in the region.

"It is on us to make sure that these stories find audiences not only within their home country but also beyond domestic markets, enabling audiences around the world to discover the stories that they will love," Kim said.

Despite Asia Pacific being Netflix’s smallest market, accounting for approximately 11% of its 2023 revenue, the region presents a significant growth opportunity due to its large and youthful population.

Following the success of original shows from South Korea, such as ‘Squid Game’, and Japan’s pirate series ‘One Piece’, Netflix is implementing a similar strategy in Thailand, Indonesia, and the Philippines.

In Thailand, the company plans to release 10 original titles this year, up from six in 2023. Indonesia will also see an increase in original titles and a larger production budget.

"Indonesia still tends to have more conservative themes as it's a Muslim country," said Dhivya T, lead analyst at Media Partners Asia, according to the report. "Thai content is more accessible and travels bit more in the Southeast Asia region with its universal story lines as well as production values."

Localized content is crucial in Asia, where about 80% of premium video engagement is driven by such titles, according to Media Partners Asia. Netflix’s push in Southeast Asia contrasts with rivals like Walt Disney Co. and Amazon.com Inc.‘s Prime Video, which are scaling back in the region.

Netflix’s recent successes include the Thai thriller “Hunger” and the Indonesian series “Cigarette Girl.” The company is now producing Indonesia’s first large-scale zombie horror series, “Abadi Nan Jaya,” set to debut in 2025.

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Why It Matters: Netflix’s aggressive expansion in Southeast Asia comes amid a series of strategic moves aimed at diversifying its content and revenue streams. Earlier this month, Netflix announced it is seeking a production partner for its Christmas NFL games, marking its first major foray into live sports. This move is part of Netflix’s broader strategy to expand its advertising tier.

Additionally, Netflix has been making headlines with high-profile events such as the rescheduled Jake Paul–Mike Tyson boxing match set to stream live in November, and the upcoming hot dog-eating contest featuring Joey Chestnut and Takeru Kobayashi. These events aim to attract a diverse audience and boost engagement on the platform.

Netflix’s efforts to monetize account sharing could also play a significant role in its financial performance. Analysts predict that the company could monetize 40 million borrowers by the end of 2024, potentially driving a 25% upside in its stock value.

Price Action: Netflix Inc. shares closed at $685.67 on Tuesday, up 1.46% for the day. In after-hours trading, the stock increased slightly by 0.057%. Year to date, Netflix has gained 46.35%, according to the data from Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote