As Netflix (NFLX) pursues international expansion by making local content for foreign countries, it's offering a plethora of non-English language movies and TV series to subscribers in the U.S.
XNetflix's domestic subscribers are being pitched more and more dubbed and subtitled foreign shows. At the same time, Netflix is losing content from Walt Disney (DIS) and other Hollywood studios, which plan to start competing services.
The move to add more foreign content domestically could end up turning off a portion of Netflix's U.S. subscribers, says Phillip Swann, publisher of TV Answer Man.
"Every week I look at the list of new titles coming to Netflix and I've noticed in the last three to six months an increasing number of shows and movies that were originated overseas and not in the English language," Swann told Investor's Business Daily. "It seems like it's getting more and more every week."
Netflix Taking A Different Path
It makes sense for Netflix to maximize its content spending by offering its foreign content to subscribers worldwide, Swann said. But it's worth questioning what U.S. subscribers will think of the increasing foreign content mix on their home screens, he said.
"There hasn't been a lot of conversation about whether this could hurt their U.S. effort," he said.
U.S.-based media companies traditionally focused on English-speaking markets. They then would dub or subtitle their content for other languages after production. But Netflix is taking a different approach. It is tailoring video content for viewers by geographic market and then offering that diverse content worldwide. As a result, the service has become quite cosmopolitan.
The trouble is big Netflix competitors in the U.S. are ramping up their spending on English-language programming. That includes existing competitors like Amazon.com (AMZN) and upcoming services from Disney and Apple (AAPL).
Netflix is following a different path.
"They're clearly making a statement that they're creating content for as many nations as they can," Swann said. "But there's a danger to it."
While Netflix is ramping up the foreign content on its U.S. service, it is canceling high-profile U.S. programs. Shows getting the ax include "Marvel's Daredevil," "House of Cards" and "Orange Is the New Black."
"At some point, are people going to say, 'Whoa, where are the shows that I like?' " Swann said. Television audiences tend to watch shows in their own language and with actors with whom they're familiar, he said.
Foreign-Language Content Not A Big Hit In U.S.
So far, foreign-language programs aren't exactly catching fire with viewers in the U.S., according to Parrot Analytics, a global TV analytics firm.
Netflix's English-language originals outperform its non-English-language originals by a wide margin in the U.S., Samuel Stadler, vice president of marketing for Parrot Analytics, told IBD.
Also, U.S. demand for foreign-language digital originals was "more or less flat in 2018," he said.
Most Popular Foreign Shows On Netflix
Among Netflix's top-rated foreign-language programs in the U.S. are "La Casa de Papel" from Spain, "Kingdom" from South Korea, "Club de Cuervos" from Mexico and "Dark" from Germany, Stadler said.
Netflix isn't showing any letup in production of English-language content either. But recent news points to the company's growing emphasis on non-English-language programming.
- On Feb. 6, Netflix announced five new original shows to be made in Spain. They include a down-to-earth superhero comedy, a gripping drama and a female dramedy.
- On Feb. 12, it announced the filming of "Ares," its first Dutch original series, had begun in Amsterdam. The psychological horror series will debut later this year.
- On Feb. 13, it announced the production of three new European series: two from Germany and one from Norway.
- On Feb. 21, Netflix landed the global streaming video rights to big-budget Mandarin sci-fi film "The Wandering Earth." Netflix is translating the Chinese movie into 28 languages.
- On Feb. 24, it won three Oscars for its movie "Roma," including Best Foreign Language Film, at the Academy Awards. The Mexican movie also took home prizes for Best Director and Best Cinematography.
- On March 6, Netflix announced that it acquired the rights to Nobel Prize-winning author Gabriel Garcia Marquez's literary masterwork "One Hundred Years of Solitude." The 1967 novel is being turned into a Spanish-language TV series.
Netflix stock dipped 0.7% to 356.27 on the stock market today. It has been consolidating for the past 38 weeks with a buy point of 423.31.
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