“Squid Game” and Calculating the “Value” of Global Content

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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.