To The Moon

• $Netflix(NFLX)$ s The Squid Game 2 topped the TV show charts in 92 countries after its launch on December 26th, with numerous brands partnering with it to launch co-branded products and a massive global rollout.

• Due to the abrupt ending of the second season, the unlikable protagonist, and the irrationality of many of the plot devices, word-of-mouth has been far weaker than that of the first season, which could put a damper on future continuity;

• In 2025, $Walt Disney(DIS)$ will also have a number of heavyweight movies and TV productions on the shelves, and I'm afraid that it will also be a "big year" for content, and relatively speaking, competition will also intensify.

  

Is "The Squid Game 2" Netflix's saving grace?I'm afraid it's the last one

1. Subscriber Growth and Retention

   • Attracting New Subscribers: The huge success of Season 1 of The Squid Game brought a huge number of new subscribers to Netflix, and the launch of Season 2 continued the IP's popularity.Its global appeal was evidenced by the fact that it topped the TV show charts in 92 countries on the first day of its launch, and remained at #1 in 93 countries on the third day.This widespread interest helps Netflix to attract more new subscribers, especially in different regions of the world, and further expand its subscriber base.

   • Increase subscriber retention: For existing subscribers, sequels to popular IPs can increase the stickiness of subscribers to the platform.When subscribers are anticipating and actively watching Squid Game 2, their activity on the Netflix platform increases, reducing the likelihood of subscriber churn.Consistently delivering popular content is one of the key factors in keeping subscribers subscribed for the long term.

2. Content Strategy and Branding

   • Enriching content genres: The production of "Squid Game 2" demonstrates Netflix's efforts in content innovation and expansion.It not only inherits the battle royale survival game mode of the first season, but also adds new game design, social issues and other elements, enriching the platform's content genre.This demonstrates Netflix's commitment to providing viewers with a diverse viewing experience that meets the tastes and needs of different viewers.

   • Strengthening brand image: As a phenomenal IP, the "Squid Game" series has become an important calling card for Netflix.By creating high-quality, topical sequels, Netflix has further strengthened its leadership and brand presence in original content.Viewers associate Netflix with the production of hit, innovative series, increasing the platform's visibility and reputation globally.

3. Commercial Expansion and Profit Model

   • Co-branding cooperation and peripheral products: The series launched a series of products in co-branding cooperation with McDonald's, PUMA and many other brands, as well as launching the official hand game and offline experience, which fully exploited the commercial value of the IP.These collaborations have not only brought Netflix an additional source of income, but also expanded the brand's influence and coverage through cross-industry linkages, realizing a diversified profit model.

   • Exploring the drama-game linkage model: The official handheld game Squid Game: Unleashed forms a "drama-game linkage" with the drama series, which is Netflix's active exploration in content commercialization.This model can attract the dual attention of gamers and fans of the show, increase user participation in the Netflix ecosystem, and provide experience and ideas for future content marketing and profit model innovation.

4. Declining word-of-mouth

• Douban's score dropped from 7.7 in the first season to 6.4 in the second season, and the comparison of IMDB scores is also obvious, with the second season ending scoring only 6.8 for a single episode due to "abruptness" and "unfinished".

• The production and issues are fully upgraded: the production cost of 100 billion won, the network of many popular artists, the protagonists all return, the supporting cast of idol stars, and there are new attempts in the game design and thematic expression, such as the addition of new characters to correspond to the social reality, and the exploration of the democratic system.

• Criticized for "dragging and watering down", the details of padding, emotional scenes and voting sessions account for a large proportion, affecting the pace and losing the advantages of the first season; the protagonist, Sung Ki Hoon, is not likable, the plot is not set up reasonably, wasting his acting skills and there is an element of selling corruption; the ending of the failed uprising to pave the way for the third season, which makes the audience feel bad about the viewer's perception.

Investor expectations

1. Continued content innovation and blockbuster hits

   • Innovative Content Formats: Investors expect Netflix to continue to explore new and innovative content topics and formats, with unique concepts and highly watchable productions like The Squid Game.In the highly competitive streaming market, the only way to capture viewers' attention and stay ahead of the curve is to keep pushing the envelope.For example, further exploring the combination of technologies such as virtual reality (VR) and augmented reality (AR) with content to bring viewers an immersive viewing experience.

   • Create more hit series: In addition to the "Squid Game" series, investors hope that Netflix can replicate its successful model and create more hit series and movies with global impact.This requires precise market positioning, excellent production teams and effective marketing strategies.By consistently launching explosive content, we can attract more users to subscribe and increase the number of paid users and revenue of the platform.

2. Global Market Expansion and Localization Strategy

   • Deepen the cultivation of existing markets: Continue to strengthen content investment and localization operations in Asia-Pacific and other markets with large increases in subscribers and revenues, such as South Korea.We will further explore local cultural characteristics and audience preferences, and produce more original content that meets local tastes, so as to increase user loyalty and market share.

   • Explore emerging markets: Seek new growth opportunities and actively expand into emerging markets such as Africa and Latin America.To formulate appropriate pricing strategies, content strategies and promotion strategies for the characteristics of these markets, so as to promote Netflix's services to a wider group of global users and realize the continuous growth of the number of users.

3. Optimize Profit Model and Cost Control

   • Diversified profit channels: More attempts were made in the fields of advertising and e-commerce, such as inserting advertisements reasonably in the broadcast of episodes or launching related products through cooperation with e-commerce platforms to further expand profit channels.At the same time, optimize the subscription price system and launch differentiated subscription packages according to different regions and users' needs, so as to increase users' willingness to pay and average income.

   • Cost management: In terms of content production, under the premise of ensuring quality, control costs reasonably.Avoid financial risks caused by over-investment and improve the return on content investment.At the same time, we will optimize operating costs and improve efficiencies to ensure the company's profitability and financial health, and deliver stable returns to investors.

The Squid Game 2 is significant for Netflix in terms of subscriber growth, content strategy and commercial expansion, and investor expectations for Netflix in 2025 revolve around the key areas of content innovation, market expansion and profitability optimization, where Netflix will need to continue to work to meet market and investor needs.