On the wildly popular Netflix survival drama Squid Game, characters risk life and limb in a series of violent trials overseen by an enigmatic syndicate.
On Monday, the struggling streaming giant announced a second season of the show — ironically, though not surprisingly, the prospect of more death-filled mayhem is breathing life into one stock closely aligned with the series. Dramatic twist: it’s not Netflix.
King of the K-Wave
South Korea is a heated battleground for streaming services for two reasons. First, South Koreans love locally produced content — within Korea, 70% of premium video consumption is of domestic shows, while US content captures just 14%, according to research firm Media Partners Asia. Second, the rest of the world loves Korean content, too — see boy band BTS, the world’s best-selling musical act for two years running, and 2020 Oscar Best Picture winner Parasite.
Squid Game, which cost Netflix $21.4 million to produce, achieved international phenomenon status upon release last September. Internal Netflix documents seen by Bloomberg suggest the show, viewed by over 142 million households, generated $890 million in “impact value” — a metric Netflix uses to calculate how much a show was worth to the company. So renewing the series seems obvious, the biggest beneficiary less so:
- Shares in Bucket Studio, which holds a stake in the agency that represents Squid Game star Lee Jung-jae, rose 24% in Seoul on Monday, as Asian stocks were hit by huge selloffs — South Korea’s Kospi index fell 3.3%.
- Netflix, meanwhile, tumbled almost 7% back home on the NYSE.
Netflix is South Korea’s leading streamer, with 8.4 million subscribers as of March, more than double second-place Wave’s 3.4 million. Disney+ has 1.2 million subscribers and has launched seven Korean shows, while Apple, Paramount, and HBO Max are all relatively new entrants.
Reversal of Fortune: Netflix, already down 70% this year, projects to lose 2 million subscribers in the second quarter, meaning its next financial statement could feature more casualties than Squid Game.