The Business Successes of Netflix's Squid Game

Netflix, Public domain, via Wikimedia Commons

Said to be the most-watched show on Netflix, Squid Game is a dark and gritty rendition of Korean childhood games. Over nine episodes, viewers follow 456 players who fight to the death for a cash reward of $38 million. The show mixes deeply entrenched poverty, class anxiety, and income inequality with nostalgic Korean pastimes. The show has indeed sparked a global interest in Asian culture, with it topping more than 90 countries’ Netflix charts, which is unprecedented for a Korean show (and any TV show). Consequently, the positive reception towards the show has created a ripple at the macro level. 

Big Gains for Media Companies

Squid Game has proven to be so successful that it is driving the stocks of those media companies involved in the production to new highs. During the week Squid Game was released, Netflix hit an all-time high closing at $610.34, as investors became reassured that the company can still produce hits that grow its subscriber base. Similarly, Bucket Studio Co., a company that holds a 15% stake in the show’s lead actor (Lee Jung-Jae) agency, saw a 70% increase in the last few weeks, with its market cap approaching $170 million. Showbox Corp, whose predecessor had invested in Siren Pictures, the show’s privately owned production company, jumped more than 50% last week before slipping.

Sweet Success 

In Episode 3 of Squid Game, viewers are introduced to the Dalgona honeycomb candy. Here, players crouch over their dalgona honeycomb candy made of melted sugar and baking soda to successfully cut out shapes under time pressure. Those who fail to make it are eliminated. The candy rose to popularity after the Korean war as a cheap snack substitute. Eventually, the candy was turned into a game and was called “ppopgi” by Korean street vendors, who offered a free bonus if children successfully pulled shapes from the toffee treat. 

With the Dalgona candy making an appearance in Episode 3, vendors in South Korea have embraced the warm reception wholeheartedly. Lim Chang-joo and his wife Jung Jung-soon, who produced the show’s Dalgona candies, now see many lines of customers waiting to get their treats. Likewise, An Yong-hui, another Dalgona seller, shares that to meet up with the demand, he has not been able to go home for a week. From selling less than 200 pieces before the show’s premiere, he now sells more than 500 Dalgonas per day. 

Breaking the Internet

Squid Game has proven to be so popular that a South Korean broadband provider is suing Netflix for utilizing too much bandwidth due to traffic surges caused by the show. Due to the high volume of streaming, SK Broadband is requesting that the platform cover all maintenance costs. According to Reuters, this news comes after a Seoul court ruled that Netflix should "fairly" pay the internet service provider for its abundant network usage. A number of South Korean lawmakers have spoken out against content providers (such as Netflix) who refuse to pay for network usage despite generating a large amount of traffic. Netflix's internet traffic with SK Broadband increased by 24 times since May 2018. Netflix now processes roughly 1.2 trillion bits of data each second, thanks to the success of Korean films like Squid Game and D.P. SK projected that the streamer owed roughly 27.2 billion won ($22.9 million USD) in 2020 alone.

The immediate success of the Korean show proves that Netflix’s biggest advantage is foreign language TV. With its competition actively expanding its international customer base, it's safe to say Netflix has the lead for now. Hopefully, with the positive reception towards Squid Game, Asian media might be given the spotlight and appreciation it truly deserves.