The market value of the company has soared by 120 billion behind the global popularity of the "squid game". But the real winner is.

If you play a game, you will get 500 yuan if you win, and if you lose, you will be slapped. Do you want to play?

Compared with the gains won, the cost of losing is small, and many people choose to play.

Now invite you to play the game, if you win, you can get 250 million yuan, but if you lose, you will lose your life?

456 impoverished and desperate people on the edge of society participated in this game of PLAYERUNKNOWN'S BATTLEGROUNDS's survival.

In less than a month, the South Korean series "Squid Game" released by Netflix (hereinafter referred to as "Netflix Inc") even gave people the illusion that "the whole world is watching it, and I will be out of date if I don't watch it." Netflix Inc, in conjunction with CEO Ted Sarandos, said publicly that "Squid Game" is likely to be the most successful film and television production we have ever made. "

The "squid game" became popular, and Netflix Inc made a lot of profits, once again pulling Netflix Inc's number of global paying households, accelerating the process of Netflix Inc's globalization, and really boosting its market capitalization. Netflix Inc's share price closed at $589.35 on the day "Squid Game" was broadcast on Sept. 17. As of Oct. 8, its closing price was $632.66, an increase of 7.35%, and its market capitalization increased by about $19.2 billion (about 123.7 billion yuan).

Both the unfinished 2021 and the coming 2022, Netflix Inc forecast earnings picture source wind screenshot

And how does the "Korean original + Netflix Inc promotion" model break the fixed path of "Hollywood takes all"? After the "squid game" is out of the circle, fake IP derivatives are flying everywhere, how can content companies become the big winners of the IP business?

From a start-up company that started by leasing CDs online to a streaming giant that competes with Disney, Netflix Inc's every step has been seen by the entertainment industry as an apocalypse over the past 20 years. Squid games are destined to be an important page in the apocalypse.

South Korean "squid" was brought to the global table by Netflix of the United States.

The script of "Squid Game" was completed ten years ago. But over the past decade, South Korean TV dramas have been steeped in the creative inertia of pink and romantic sweet dramas, and such a dystopian drama with a dark theme has been rejected by local South Korean film and television companies on the grounds of "absurdity and unreality."

Everything was reversed after Netflix Inc joined the game.

Prior to the Squid Game, Netflix Inc had successful experience in incubating popular dramas in cooperation with overseas film and television companies such as South Korea, Japan and the United Kingdom. Crown, which claims to be the most expensive British drama in history, swept seven Emmy Awards. The popularity of the South Korean drama Kingdom is comparable to that of Game of Thrones.

The screenwriter of "Kingdom" once concluded that Netflix Inc set aside a sufficient budget and fully let go of the local team in creation. At the same time, Netflix Inc also introduced the industrialization system of American TV series, especially strict on post-production and quality, and did not hesitate to renew dramas that did not meet expectations after broadcasting.

According to relevant media reports, Netflix Inc's total investment in squid games reached 20 billion won (110 million yuan). As a nine-episode short play, the investment for a single episode is as high as 12 million yuan. The show brings together South Korea's top cast. Huang Dong-hyuk, who wrote the screenplay, is also a director. Before that, his most famous work was melting pot, while the cast included Lee Jung-Jae, Park Hai-soo, Ggong Liu and Li Byung-hsien.

Poster of "Squid Game" Photo Source: Douban

The blessing of the all-star lineup sets a limit to the level of the show, while the upper limit still depends on the content itself. Squid Game describes the story of 456 desperate people on the edge to take part in a "gamble". The way to gamble is to play the game with a bonus of 45.6 billion won (240 million yuan) and each person's own life. The losers in each round of the game will be strafed by machine guns, and the scene is extremely barbaric.

As a suspense and thriller, Squid Game has an eye-catching plot and exciting audio-visual experience, and the root of this absurd story-capital and money have forged the jungle law of the jungle. How do desperate people with high debts survive? This is the golden line in "Squid Game": the game is cruel, but isn't the reality more cruel than the game?

It is the irony that hopeless adults risk their lives to participate in a children's game that attracts people's attention, Squid Game director Huang Donghe said in an interview. Such a core greatly resonates with the audience in the real world, and it is also an important reason why the show can break cultural restrictions and win popularity in many countries.

According to Deutsche Welle, Erik Paolo Capistrano, an associate professor at the University of the Philippines who has studied Korean pop culture for years, pointed out that audiences realize that these people may exist in society, and their stories are so true that they have to do these terrible things, willing to accept harsh conditions in order to get out of poverty. "many Filipinos associate the plot of the squid game with their current understanding of their own social situation," he observed. "

Netflix Inc's growth in North America has reached the ceiling, and the number of users in Asia-Pacific has increased rapidly.

It is the dream of many film and television teams to be "photographed" by Netflix Inc, and it is the wish of all streaming media to be the next Netflix Inc.

Under the guarantee of high-quality original content, 99 per cent of Netflix Inc's income in 2020 came from member subscription services and 1 per cent from DVD services. In 2010, Netflix Inc entered Canada, but this did not meet Netflix Inc's ambitions. "Netflix Inc's penetration rate in the United States and Canada is only 60%," Netflix Inc's co-chief executive said at the earnings conference in the fourth quarter of 2020. " As the demographic dividend fades, it is still an indisputable fact that Netflix Inc's streaming business in North America has reached the ceiling.

The global search for excellent content teams to incubate "approachable" quality content has helped Netflix Inc expand his business outside North America. Netflix Inc is now a global entertainment giant, with the total number of paying users reaching 209 million in the second quarter, an increase of 8.4 percent over the same period last year.

According to Netflix Inc's second-quarter financial report, as of June 30 this year, Netflix Inc achieved revenue of 7.342 billion US dollars and net profit of 1.353 billion US dollars. Revenue from streaming services in Europe, the Middle East and Africa was $2.4 billion, up from $1.893 billion in the same period last year; revenue from Latin America was $861 million, up from $785 million in the same period last year; and revenue from the Asia-Pacific region was $799 million, up from $569 million in the same period last year.

A screenshot of Netflix Inc's financial report, a source of revenue from the Asia-Pacific region.

Although North America is still the dominant contributor to revenue, the growth of paying users in the Asia-Pacific region is something to be reckoned with. As of June this year, Netflix Inc had 27.88 million paying users in the Asia-Pacific region, an increase of 23.9 percent over the same period last year. There is still no data to officially enter the Chinese market. At the same time, North America, mainly in the United States and Canada, saw negative growth in the number of new users, with a loss of 430000 users.

As of the second quarter of this year, Netflix Inc's global paying users had a net increase of 1.54 million, of which 1.02 million were added in the Asia-Pacific region, accounting for 66.2 per cent of the total. As a result, it can be seen that when the growth of paid users in the "stronghold" reached the ceiling, the new users in the Asia-Pacific region allowed Netflix to maintain the positive growth of new users.

After the launch of "Squid Game", it not only topped Netflix Inc's global ranking list for many days in a row, but also won the championship of 83 countries and regions served by Netflix Inc. There is no doubt that this will take Netflix Inc's globalization strategy a step forward.

According to Netflix Inc's performance forecast for the third quarter of 2021, the third quarter reported a slight increase in performance, with an estimated net profit of $1.158 billion. Delano Saporu, founder and CEO of Xinjie Consulting Group, said that Netflix Inc will release Q3 results after US stock trading on October 19, and "squid game" could be a catalyst for his stock to soar. Analysts expect Netflix Inc's third-quarter earnings per share to reach $2.55 and revenue of $7.48 billion, and the number of paid subscribers worldwide will increase by 3.8 million, according to FactSet.

The derivatives of "squid game" are flying all over the sky.

The development of the industrial chain of high-quality films and TV dramas is no longer limited to the content itself. For popular dramas such as "Squid Game", the business opportunity is also obvious. When the play is still popular, many manufacturers are keen to smell business opportunities, the same game, clothing and other derivative peripheral products began to emerge in various network platforms.

"Squid Game" sets up six traditional Korean children's games from 1970s to 1980s (wooden Man, Sugar, tug-of-war, pinball, Glass Bridge, Squid Game) as a barrier-breaking link. These games are easy to understand and contain complete rules of the game, which makes the play naturally have the advantage of developing the same game products.

According to the Qimai data test, Candy Challenge 3D, All Challenges-survival game, K-Games Challenge and other games related to "squid games" ranked among the top five games in the United States, Japan, South Korea, Russia, the United Kingdom and other countries or regions in the global free games list on Oct. 9.

Candy Challenge 3D game ranking picture source: Qimai data

Through Wechat search, it is found that there are nearly 100 Mini Game names containing "squid game" in WeChat Mini Programs, some of which Mini Game has been used by tens of thousands of people.

"Squid Game" WeChat Mini Programs Game Photo Source: WeChat Mini Programs

The same game has become popular, and the surrounding area of the show is also very hot. Searching for "squid game" on Taobao and other e-commerce platforms, there are sportswear of the actor in the show, red jumpsuit for guards, sugar cakes in the "sugar cake picking" link, and they are all sold with labels such as "the same style" and "high degree of reduction". Some products have been bought by more than 5000 people.

There are squid games everywhere on Taobao with screenshots of the same picture source on Taobao.

Content matching products have indeed become a common mode for the realization of high-quality film and television works. Take the recent popularity of Universal Studios in Beijing as an example, Harry Potter clothing, magic wand, each derivative perimeter continues to create revenue for this top content IP. But how much of this explosive IP income belongs to Netflix Inc?

In Netflix Inc's e-commerce platform Netflix Shop, the eye-catching "SQUID GAME IS HERE" (squid games are here) has appeared on the home page of the website, while its surrounding products are mainly T-shirts with squid game elements, which sell for between $34.95 and $49.95. Compared with third-party platforms, the peripheral products sold by Netflix Inc himself are not richer in variety or style than the third platform, and those "peripherals of the same style" sold on e-commerce platforms such as Taobao are obviously not licensed by Netflix Inc.

Screenshot of Netflix Shop official website

In terms of games, in addition to restoring some of the games in the offline flash store in Paris and allowing fans to experience them, Netflix Inc has not authorized the development of the same game of "Squid Game" to individuals or enterprises. This means that whether you can play online games such as Candy Challenge 3D, which are already popular in many places around the world, or Mini Game on WeChat Mini Programs or Roblox, you are playing on the edge of the ball.

"the original picture design of specific scenes, specific art works and musical works in the play are protected by copyright law, and as far as the rules of the game are concerned, the classical rules of classical children's games belong to the public domain and are not protected by copyright law." Lawyer Dong Yuanyuan, a senior partner of Tianchi Juntai Law firm, told every reporter that if Mini Game uses the picture design of a specific scene in the "squid game" to form specific content, and the restoration in terms of color, layout, and cohesion reaches the degree of 'substantial similarity', it will constitute copyright infringement.

For Fang Netflix, the copyright owner, homemade games of the same style are the way to go in the future. Previously, the game of the same name developed by the sci-fi thriller "Strange things" was an attempt by Netflix Inc on the linkage of film games. At present, Netflix Inc has hired Mike Waldo as the head of the company's game business, and said in the Q2 financial report in 2021 that the company is indeed in the layout of the game industry, but will initially focus on mobile games.

Reporter | Ding Zhouyang intern reporter | Zhu Peng and Li Jianning