Study: Turning content dollars into audience - Page 28

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Also included in its content strategy, the breadth and depth of the content offered is another selling

point that helps maintain and grow a large subscriber base. However, its audience growth slowed

in the first quarter of 2021, which is directly related to the production delays of its original content

due to the Covid-19 pandemic. Still, the demand curve was pulled forward, meaning that 35 million

new customers subscribed in 2020, a number that was not anticipated to be that high. According to

Netflix’s letter to the shareholders published in April 2021, the lack of new original titles and

especially of hits is responsible for slowing subscriber growth, which it plans to offset by

publishing a large number of returning franchises by the end of 2021. Still, it managed to release a

fair amount of new content on a weekly basis, which has been very important during the pandemic

in order to keep and lock in existing subscribers. Netflix also remains the leader in terms of

quantity, variety, and distribution timing when it comes to the category of originals. However, it

still aims to expand its production to more local sites, which is supported, for example, by the

set-up of production hubs in Spain and the UK. Netflix’s organizational set-up as well as its

governance are focused especially on decentral decision-making and flat hierarchies, which

enhances the sourcing of local content.

Local content is becoming more important in order to reach out to more potential customers,

especially since saturation might soon be reached in the US, European, and South American

markets. Therefore, Netflix wants to focus on Asia, where local programming plays an essential role.