House of Cards is not your typical blockbuster U.S. television show.
For one, it’s not really a TV show. The online series, which stars Kevin Spacey and Robin Wright, is the creation of Netflix, the world’s premiere on-demand Internet streaming service. The heady and heavy drama is set in the power corridors of Washington, D.C. Corruption, betrayal, and even murderous villainy are presented as immutable facts of American political life. But it is played with none of the relief provided by, say, the white-hat heroes and gladiators of the similarly Washington-based Scandal of ABC.
It is not exactly the kind of export that you would expect to sell to the Cuban market, but, with Netflix’s arrival on Cuba’s shores just this past Monday, it’s clear that the company is gambling on Cuba to want that and much more.
Will the country star in the next chapter of the company’s localization success story?
Aggressive Two-Year Plan
While a recent thawing of relations between the U.S. and Cuba has provided opportunities to many U.S. investors, the moment is simply at the right time in Netflix’s global domination plan. Just recently, the company rocked the video-on-demand space by announcing its plans to be in a total of 200 global markets by the end of 2016. Growth in the company’s domestic American market has been slowing for some time, a trend that was instrumental in turning executive interest to foreign locales. Still, at a rate of what one analyst noted would be around six new markets per month, this new plan is a very aggressive one.
While some investors have expressed qualms, the news is nevertheless being welcomed by most. Bringing its on-demand offering of independent and foreign films, as well as its original programming to the European market last year, Netflix proved that it had what it takes to compete against even in-country streaming providers. Of the company’s 57.4 million subscribers worldwide, 2.4 million international customers joined their ranks in just the last quarter of 2014 alone. According to a report published by Bloomberg on that growth, the Netherlands, Ireland, and United Kingdom investments were even profitable.
The Fight for Foreign Markets
While credit has to be given to the strength of its offerings — which includes award-winning original series like Orange is the New Black and the aforementioned House of Cards — credit is also due to the Netflix localization strategy.
The challenges are considerable. Country-based content licensing and taxes contributed significantly to some $9.5 billion in international investment. Early analysis of the internationalization challenge predicted trouble in Europe’s non-English-speaking markets. For example, voice actors and dubbing remain common in the German-speaking markets, while subtitling is the preference in Scandinavia.
Netflix has also had to contend with pay-TV and streaming services that were already well established in their domestic markets. Back in 2011, for example, Amazon acquired LoveFilm — dubbed the Netflix of Europe by many news sources — and had since bundled it in test subscriptions for buyers of its popular Amazon Prime service. In France, Netflix has had to compete against itself because domestic pay-TV giant Canal Plus already had bought the French rights to House of Cards.
Netflix is clearly not backing down from the fight for the streaming media market. Nevertheless, some analysts believe that some localization elements will have to take a backseat to the plan. While there is word on the production of an original political thriller for the French market, UBS investment analyst Doug Mitchelson says, “[We can expect] less local dubbing, less local content, etc.” if Netflix is to achieve its 200-markets goal. Moreover, while a large market like China is attractive, anticipated licensing costs and negotiation hassles had Chief Executive Reed Hastings stating that only a “modest” offering would make sense there.
So too for Cuba. Our own coverage of the Cuban market for MultilLingual Magazine in 2010 noted that the U.S.-imposed embargo seriously crippled its language industry, leaving it terribly under-resourced for today's localization initiatives. As National Public Radio noted in its report of Netflix’s Cuban expansion, there is also the problem that more than 80 percent of the country’s residents lack Internet access. And while Cuba’s socialist system means that there is coverage of health, education, and cost of living expenses, the average salary may still not be enough for the “luxury” of Netflix at $7.99 per month.
But, who knows, maybe the temptation of seeing a Netflix series focused on a treacherous U.S. government will be as persuasive for them as it continues to be for their northern American brethren. Viva la Netflix revolución!