How to Build an Empire, the Netflix Way
By EMILY STEEL NOV. 29, 2014
Anatomy of a Scene | ‘Marco Polo’
John Fusco, creator of the Netflix series ”Marco Polo,” narrates a scene in which the 13th-century traveler enters the court of Kublai Khan.
Publish Date November 29, 2014. Photo by Phil Bray for Netflix.
In the first episode of “Marco Polo,” Netflix’s coming original series, the Mongolian emperor Kublai Khan sits on a throne in his gilded palace and plots the future conquests of his growing empire.
One adviser questions whether the ruler desires to be emperor of Mongolia or emperor of China. Khan rises from his throne, draws his sword and roars: “Emperor of China? Emperor of Mongolia? I want to be emperor of the world!”
Such an audacious declaration could very well have been written for Netflix itself as it pursues global expansion at breakneck speed. This streaming company has pushed aggressively into just over 50 countries and counts more than 50 million total global subscribers. Conquering foreign lands is now crucial as its growth slows in the United States.
“It is no secret that we want Netflix to be a global product,” said Ted Sarandos, its chief content officer. “That is the mission.”
As was the case with Kublai Khan’s 13th-century empire building, Netflix’s 21st-century mission will involve a series of battles as the company encounters vast cultural differences, fierce rivals and high costs, among other challenges.
Olivia Cheng in a scene from “Marco Polo,” an original series on Netflix, which will be available for streaming on Dec. 12. Credit Phil Bray for Netflix
Already, Netflix has stumbled. Infrastructure issues like establishing payment systems for customers proved difficult in Latin America. And about a fifth of the company’s market value has evaporated since mid-October, after it disappointed investors with slower-than-expected subscriber growth that followed its September debut in France, Germany and other European markets. Some analysts have raised concerns that rapidly rising obligations tied to paying for content (totaling $8.9 billion as of September) could leave it in a precarious financial position in the long term.
Media executives and analysts predict that as Netflix pushes ahead with its global mission, it will face threats from local insurgents, as a growing number start streaming services of their own. It must also outmaneuver competitors like Time Warner’s HBO, which already has a robust international business and announced a streaming deal last week in China.
“Netflix is the one that everybody speaks about, but there are lots and lots and lots and lots of others,” said Keith LeGoy, president of international distribution at Sony Pictures Television. “New streaming services are launching every week.”
Netflix’s global ambitions mirror a quest across the media industry to offset slowing domestic growth by expanding abroad. “Some people have said that it is checkmate before it started,” said David Bank, a media analyst at RBC Capital Markets. “But it is really, really early days.”
Netflix is doubling down on its international bet, preparing to enter markets like Australia and New Zealand next March, and snapping up the global rights for original film and television programs. But perhaps its biggest content wager is “Marco Polo,” its series about the 13th-century traveler’s adventures in the court of Kublai Khan. Netflix owns the international rights for the show, which is produced by the Weinstein Company, an independent studio, and will be available for streaming on all of Netflix’s global outposts on Dec. 12.
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At about $90 million for the first season’s 10 episodes, according to industry executives, the East-meets-West epic is not only Netflix’s most expensive original production to date, but also one of the most expensive series today. Only “Game of Thrones,” on HBO, is said to surpass that steep budget.
While Netflix has a number of original programs in the pipeline, the success of “Marco Polo” will serve as a referendum on how well its original programming strategy performs on a global stage.
Some rivals and analysts said that replicating Netflix’s early success with the drama “House of Cards” and the dark comedy “Orange Is the New Black” for international audiences could prove challenging. The programs generated buzz, won awards and are credited with attracting subscribers. While Netflix did not own global rights to those productions — meaning “House of Cards” appeared on rival TV networks in France and Germany, for instance — executives say the shows helped bolster awareness and perception of Netflix abroad.
Executives and producers said they hoped that “Marco Polo” — filmed in Italy, Kazakhstan and Malaysia with an international cast of hundreds and filled with gory battles, sexual allure, adventure, martial arts and political intrigue — would resonate with viewers around the world.
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