Squid Game: On the Money

THE IRONY ABOUT Squid Game for Netflix was that even its top ex­ecutives hadn’t seen its wild success coming. It was from their South Ko­rean stables that the show was commissioned. They knew over there it would be big, but for the Korean market. That the world would be bingewatching wasn’t on anyone’s cards. Bloomberg recently got its hands on documents that revealed how Netflix evaluates the success of shows, something that the streaming service keeps very secret. The monetary value that Netflix put on Squid Game was $891.1 million. In Indian rupees, that would come to around `6,700 crore. That is not all. For most of this year, Netflix was losing ground to competitors, with tepid subscriber growth. Squid Game changed that too.

Netflix has just announced its third quarter results in which they said they had been expecting a growth of 3.5 million subscribers, but the actual figure turned out to 4.4 million. In a letter to shareholders, they said about Squid Game: “A mind-boggling 142m member households globally have chosen to watch the title in its first four weeks. The breadth of Squid Game’s popularity is truly amazing; this show has been ranked as our #1 program in 94 countries (including the US). Like some of our other big hits, Squid Game has also pierced the cultural zeitgeist, spawning a Saturday Night Live skit and memes/ clips on TikTok with more than 42 billion views. Demand for consumer products to celebrate the fandom for Squid Game is high and those items are on their way to retail now.”

How does such magic happen? During a conference call with investors after announcing their results, Theodore Sarandos, the company’s co-CEO, said he didn’t know. “And it happens. And we feel it when it’s happening and you know when it’s happening. It’s a little hard to predict sometimes. Sometimes you think you’ve got lightning in a bottle and you’re wrong. And sometimes, you think you’ve got a great Korean show that turns out to be lightning in the bottle for the world.”

Squid Game is not ingenious. The story of a group made to play a game in which the stakes are life and death—remember Hunger Games?—has been done so often that it is almost a genre by itself. Squid Game brings in a few touches, like the games being those played by children, and thus the contrast of the lethality being starker. Or inserting into it the nature of modern poverty. A New York Times article headlined “Behind the Global Appeal of “Squid Game”, a Country’s Economic Unease”, said: “it has also tapped a sense familiar to people in the United States, Western Europe and other places, that prosperity in nominally rich countries has become increasingly difficult to achieve, as wealth disparities widen and home prices rise past affordable levels.”

None of these make for a definitive reason for its becoming the flavour of the year. But it ticks off the boxes necessary for something to go viral. Even though the word “dystopian” is used to describe its setting, Squid Game is good storytelling with characters you feel for. It has heroes, it has villains. It has good people straying and returning. It has a taut plot that moves at pace. It also has a layer of authenticity because the director, Hwang Dong-hyuk, first conceptualised the project a decade ago when he was deep in debt. He subsequently found success as a filmmaker but Squid Game’s characters, who are forced to participate in the game because they have loans to pay off, have his experience within them. This could ironically also be the reason why if there is a sequel, it might not be as good as the original.

Netflix might have pegged what it earned at $900 million but its market capitalisation, or how share markets value the company, has seen a rise of around $20 billion. The market has realised a new equation might be at work in future. Squid Game cost just $21 million, a fraction of what a US show budget would be. Yet, a show in a different language has beaten all English shows in English markets and earned 40-50 times what was spent on it. That opens up the potential for more Squid Games from all parts of the world.

digital businessNetflixSquid Gamestreaming businessTheodore Sarandos