The Power Of Netflix Can't Be Denied

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Hey Friends,

The cultural impact of Netflix can’t be understated.

Squid Game, the Korean survival drama about desperate adults competing in children's games for a chance to escape severe debt (& death!), has already been viewed by roughly 150 million households, or roughly 70% of all Netflix subscribers.

The series cost Netflix $21 million to produce, but they estimate it has provided nearly $1 billion in “economic value” already. That’s insane.

To be fair, I don’t know how they calculate the economic value, and maybe it’s slightly inflated, but you get the point. Heck, even slip-on shoe company Vans saw a 7,800% bump in sales after characters in the show wore their shoes.

The craziest stat? After gaining just 2.2 million subscribers in Q3 2020, Squid Games aided Netflix in adding 4.4 million subscribers in Q3 2021, rebooting overall subscriber growth for the streaming behemoth.

Netflix Global Paid Sub Growth

• Q3 2020: 2.2 million

• Q3 2021: 4.4 million

At an average lifetime value of $291.25 per subscriber, that 2.2 million subscriber bump is worth an estimated $640 million to Netflix. Again, there is nuance to this, but you get the point — the show is a massive success.

But Squid Game is just one example. Another is the partnership between Netflix and Formula One, debuting the now-popular “Formula 1: Drive To Survive” series in 2019.

As we know, the documentary-style series follows Formula One and its teams throughout the season. You learn about the drivers, their rivalries, the cars, and the inner workings of the world championship series, but more importantly, you’re given a behind-the-scenes glimpse into the paddock that traditional broadcasts fail to capitalize on.

The results are also quantifiable.

Formula One’s social media engagements soared 99% last year to 810 million, and over 75% of Formula One’s audience growth in 2020 came from those aged between 16 and 35, a critical demographic for broadcast and advertising partners.

That’s without a single American driver competing at the sport’s top level.

Furthermore, here’s a chart that my friends at The Race & WTF1 showed me.

They run a popular motorsports media business, and the United States is now their number one audience across several platforms.

Now, this isn’t necessarily a secret. The success of the Netflix & Formula One partnership has been well-publicized, and other sports organizations like the PGA Tour are now attempting to replicate it.

But this is the future of content for professional sports teams & leagues. The younger generation isn’t watching cable TV, nor do they typically care about the X’s and O’s behind a football game.

Instead, they spend their time in the digital world. They watch YouTube and Netflix for hours each day and envision a future with their friends in the metaverse. Netflix is part of that, of course, but it’s really just the tip of the iceberg.

The most popular sports leagues of tomorrow realize this today.

I hope everyone has a great day, and we’ll talk tomorrow.

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Huddle Up is a daily letter that breaks down the business and money behind sports.

Join more than 48,000 professional athletes, business executives, and casual sports fans that receive it directly in their inbox each morning — it’s free.

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