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Survival-themed horror-drama Squid Game was the most in-demand series debut of 2021 and is on track to becoming a $2 billion+ bonanza for Netflix through 2027 as further series are rolled out, according to data from Parrot Analytics.
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With two more series in the works, Parrot projects that Squid
Game will generate more than $2 billion in cumulative revenue by 2027 – not
bad considering Netflix reportedly
outlayed $21.4m to produce the first hit season.
This analysis comes courtesy of a new way of measuring the
value of content outside of just the number of viewers who have watched it. The
key to increasing the lifetime value of a piece of content is its ability
to retain viewers over time, Parrot’s
analysis found.
That lifetime value makes Squid Game much more
valuable to Netflix, on a profit margin basis, than some of the streamer’s more
expensive investments in film, such as Red Notice and The Gray Man,
which each cost Netflix roughly $200 million to produce.
“Each film caps out at around $80 million in cumulative
revenue for Netflix over the next six years,” reports
Axios, “suggesting that pricey streaming films tend not to deliver the same
level of lifetime value to streamers as do cheaper, bingeable series.”
Parrot says its Content Valuation measurement system can
determine the value of any title for any distribution service by measuring its
historic and forward-looking impact on user acquisition and retention for that
service, within each market.
For example, notes Axios, long-running comedies and sitcoms,
like Friends and The Office, tend to be strong retention titles,
as do bigger-budget original series such as Stranger Things and The
Crown.
For a long time, Hollywood has been operating in the dark
about the value certain content drives for streamers.
In a quote to Axios, David Jenkins, creator of HBO Max
series Our Flag Means Death, said, “Streaming networks have access to
the most granular audience data. Unfortunately, they’ve deemed these analytics
off-limits to their partners. This has created a widening power imbalance
between companies and creators.”
Parrot’s new metric aims to address this imbalance. “In an
increasingly streaming-focused world, viewership alone doesn’t translate into
direct growth or subscribers,” said the company’s VP of Applied Analytics,
Alejandro Rojas in a release. “Capturing consumer demand through a more
comprehensive set of signals of intent is the most effective approach to
determine what's valuable and what's not. What does audience demand tell
executives about their overall product, why are people subscribing to a
streaming service, who is at high risk of churn, how and when do you intervene
to impact the number of customers subscribing month after month.”
It is very important to note that Squid Game is a
non-English speaking language original. While a dubbed version was offered most
fans and critics gained more in understanding the drama by watching with
subtitles.
Indeed, demand for the Korean show is still high. Squid
Game topped the list of non-English language
shows in demand among US viewers recently, in other Parrot stats, and is part
of a wider trend for original stories outside of the Anglo-American cultural
hegemony.
According to Parrot Analytics its Content Valuation metric
will help global entertainment leaders determine whether or not to acquire or
produce a title, where it should be released and whether to go theatrical or
not, the overall value contribution of a title to an existing library and the
value of an entire library. “It will determine projected value across multiple
seasons for a TV show or the value of a film to a streamer five years after the
fact, just to name a few,” CEO Wared Seger said.