Netflix's Global Push Means Big Spending in Small Countries

Marseille Still - H 2016
David Koskas/Netflix

Marseille Still - H 2016

The streaming giant has budgeted an estimated $1.2 billion for original productions this year, with a quarter of that expected to be spent on titles produced outside the U.S.

This story first appeared in the Feb. 19 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

Netflix's splashy spending at Sundance grabbed headlines, but the real story may be how the streaming giant is splurging on original content overseas.

Netflix in 2016 is projected to spend about $1.2 billion on original productions, according to British research group Ampere Analysis. And about a quarter of that is expected to be titles produced outside the U.S. The projects start rolling out Feb. 19 with the release in China of Crouching Tiger, Hidden Dragon: Sword of Destiny. But others include The Crown, an epic drama about the history of the British royal family. The series is written by The Queen scribe Peter Morgan and directed by Stephen Daldry and is projected to cost $143 million for its first two seasons, making it among the most expensive TV series of all time. (By contrast, Netflix paid $100 million for the first two seasons of U.S. breakout House of Cards.) There's the 10-episode Italian crime drama Suburra, rumored to be costing Netflix $18 million to $20 million; and the French political drama Marseille, billed as a French House of Cards and starring Gerard Depardieu that's expected to cost $8 million to $10 million.

South Korean production company Okja SPC says Netflix will invest $50 million in Okja, a one-off monster movie from Snowpiercer director Bong Joon Ho. Foreign originals in the production or planning stage include Brazilian sci-fi series 3%, the Mexican dramedy Club de Cuervos and a Japanese coming-of-age tale set in Tokyo's upscale Ginza district.

"In key markets — U.K., France, Italy, Spain, Mexico — you will start to see focus on high-value TV series, especially ones with a strong global appeal," says Ampere analyst Guy Bisson. Netflix does not disclose budgets for original series, but content chief Ted Sarandos doesn't deny he is spending big to grow foreign subs. Growth in the U.S. has slowed — Netflix expects to add 1.75 million U.S. subs in the first quarter, a 23 percent year-over-year decline. But internationally, business is booming, with 4.4 million new subscribers expected this quarter, a 68 percent jump.