Netflix's stock price soars by 120 billion, producers can't get the revenue share, causing controversy

123 wooden people, picking sugar cakes, playing marbles, tug-of-war, crossing bridges, squid games... Recently, a Korean drama called "Squid Game" has become popular all over the world.

In China, as of noon on October 7th, the number of topics on Weibo on Weibo of #7 is as high as 1.8 billion. On social platforms such as Douyin and Zhihu, the search volume and reading volume of "Squid Game" are also high.

From a global perspective, the play has continued to dominate the charts in many countries and regions in the Asia-Pacific region for several weeks; in North America, the play has topped the production company Netflix (NFLX.US) for two consecutive weeks. ) Freshness was once 100% capped.

Netflix co-CEO Ted Sarandos has publicly stated that "Squid Game" will become Netflix's most popular non-English series so far.

A

Why is "Squid Game" so popular?

Because it is simple enough

Real and impactful

From the content point of view, "Squid Game" is a series similar to the theme of Battle Royale. Gather a large number of people who are forced to desperate by life and play games together. The loser loses his life on the spot, and the winner takes the bonus. In general, the reason why "Squid Game" is so popular is that it is simple, realistic and impactful.

The first is simplicity. The plot of the play is simple enough: a group of people play the game together, the winner enters the next round, and the loser is eliminated. The 6 games are 123 Wooden Man, Sugar Cake, Tug of War, Marbles, Crossing the River, and Squid. Most of them belong to childhood games. The audience does not need to "brain brain" to understand the rules of the game. Therefore, watching "Squid Game" basically does not require any threshold, and it is easily accepted by users of different regions, different education levels, and different age levels.

The second is truth. The games in the play are those that most viewers have played in their childhood. The real game makes people feel substituting. At the same time, the character setting in the play portrays these “dead and desperate” contestants as if they are entering middle age. But the male protagonist who failed to accomplish anything, the "student tyrant" male second who was placed high hopes by his mother, the multinational migrant workers who were squeezed by the company boss, the street gangsters...Every character is portrayed by the audience more or less in their own or I found some sympathy in the people around me.

The last is impact. There are only 9 episodes in total in the show, which continues Netflix's previous style. The short and concise content makes the series easy to trigger public discussion in a short time; at the same time, the presentation of a large number of shocking shots in a short time also brings strong visual impact to the audience; on the other hand, there are conflicts everywhere in the play Plot settings, such as the opposition between the rich and the poor, and the many tests and choices faced in the face of money and killing such as friendship, family affection, love, etc. These problems all directly refer to human nature and bring strong psychological impact to the audience.

In general, this drama can be regarded as a "cool drama". It is understood that Netflix, the producer of "Squid Game", is not stingy with the investment in the production of the show. The total investment is as high as 20 billion won, which is equivalent to about 110 million yuan, which is equivalent to a single episode of 22 million yuan. The final presentation Come out such a work that "out of the circle" on a global scale.

Netflix behind "Game of Squid"

Have made a lot of popular content

210 million paid membership users

"Squid Game" is produced by Netflix. As the world's largest long video streaming platform, Netflix has produced a number of popular content, such as "House of Cards", "Drug Lords", and "Women's Prison". As of the first half of 2021, Netflix has 210 million paid member users.

Looking back at its growth history, Netflix did not do it overnight, and progressed slowly through three stages.

●1997~2006: Online leasing business stage

Netflix was established in 1997 and started as an online CD rental business. At that time, Netflix pioneered the "Three No Policy" with no expiration date, no overdue fee, and no postage, allowing 80% of free members to be converted into paying members after one month. In 2002, Netflix, which successfully went public, defeated the offline leasing giant "Blockbuster" in one fell swoop and became the number one DVD leasing industry in the United States. By 2003, the number of Netflix users was close to 1.5 million.

●2007~2010: Enter the online streaming media business

At this time, Netflix aimed at the opportunity to launch an online streaming service platform, and reached copyright authorization cooperation with Warner and Disney, etc., and popular IPs such as "Indiana Jones" and "Star Trek" landed on Netflix. During this period, Netflix once again experienced a high increase in users, from 1.16 million in 2007 to 7.44 million in 2011, with a cumulative net increase of 6.28 million in four years. With the promotion of the Internet, streaming media has become the general trend, and Netflix's new decade of growth is starting from this.

●2011-present: split the business and move towards self-control

In 2011, Netflix separated the DVD rental business from streaming media, the main site only retained streaming media, and the rental business established a separate website "Qwikster". At that time, Netflix had not yet begun to produce content, and this radical operation also caused some users to lose Netflix. However, the explosion of "House of Cards" brought a new story to Netflix. In 2013, the launch of "House of Cards" caused a sensation in North America, and the number of Netflix users surpassed HBO for the first time. Following "House of Cards", Netflix has also continued to invest in self-produced dramas.

At present, Netflix's investment in content (self-made + independent copyright buyout) is the largest in the world, and the continuous accumulation of content has gradually highlighted Netflix's advantages and the moat has become more stable.

Users were willing to pay for high-quality content, and with the support of high-quality content, Netflix began to increase prices all the way. From the standard version of USD 9.99/month in 2015 to USD 13.9/month in 2020, the fiercely competitive long video streaming market shows Netflix’s confidence in its content. The number of Netflix's global paying users has continued to grow steadily, and market feedback has also confirmed that Netflix's continuous price increase is not a blind move.

C

What does "Squid Game" bring to Netflix?

Soaring stock price

The globalization process is further accelerated

Netflix is undoubtedly the biggest beneficiary of the explosion of "Squid Game".

The first is the soaring stock price. This popular global "Squid Game" directly pushed Netflix's stock price to a record high. On September 17, the day when "Squid Game" was broadcast, Netflix's closing price was US$589.35 per share. As of October 8, 2021, Netflix's closing price was US$632.66/share, and the total market value increased by US$19.2 billion (approximately). RMB 123.7 billion).

Secondly, the explosion of "Squid Game" will once again boost Netflix's global paying users, thereby boosting its main business revenue.