Al reshapes the norms of cultural distribution

As Netflix has greatly expanded its global reach, it has substantially reshaped the local audio-visual industry. The enormous penetration of Netflix has influenced several key areas: distribution, production, exhibition, and the platform industry itself. Al-saturated Netflix impacts workflow in cultural production and distribution. While Netflix can be identified within television studies, as discussed in Chapter 1, this book posits Netflix as a digital platform—“a computational, software-based system that can produce a television-like experience as just one of its potential applications” (Lobato, 2019, 35)—as well as a commercial and corporate agency. It is crucial to analyze Netflix as a platform that relies on Al and algorithmic recommendations as can be seen in Google and Facebook as well due to its major dimensions discussed in Chapter 2.

Most of all, one of the most distinctive areas that Netflix globally influences is distribution. As Netflix itself reveals (2019c), it especially innovates using machine learning in many areas where it designs, implements, evaluates, and productionizes models and algorithms. Machine learning impacts several areas. For example, personalization, mainly discussed in Chapter 7, has been the most well-known area, where machine learning powers Netflix’s recommendation algorithms. Netflix also utilizes machine learning to help shape its catalog of movies and television shows by learning the characteristics that make content successful. Netflix uses it to optimize the production of original television shows and movies. ML enables the company to optimize video and audio encoding and adaptive bit rate selection that accounts for more than a third of internet traffic in North America. Meanwhile, it powers advertising spend, channel mix, and advertising creativity so that Netflix is able to find new paid subscribers who will enjoy Netflix (Netflix, 2019c).

Netflix machine learning director Tony Jebara indeed emphasized the role of machine learning in personalized streaming services during a presentation held at Stanford University in October 2018 (Foreman, 2018). During the presentation, he noted that, with written word and film, “the person communicating [a] story does not know what is resonating, what is not and how to improve storytelling” in most cases because they lack the direct feedback an audience could provide during in-person storytelling. However, Jebara said that applying machine learning to data solicited from users allows Netflix to proactively reach their audiences. He firmly stated,

Now we can start seeing what each account is interested in, what shows are they watching, what are they fast forwarding, what are they hovering over, what are they giving thumbs up to and thumbs down to. That kind of closes the feedback loop that we lost as we went to millions and billions as we scaled up.

(Foreman, 2018)

Based on Netflix’s testimony and its own machine learning director’s claim, it is certain that Netflix has continued to focus on the function of machine learning beyond a simple algorithmic system as its major business model, which makes Netflix one of the most advanced Al digital platforms.

More recently, Netflix’s distribution power equipped with Al has changed the conventional way of production in the local cultural market. Several major impacts have reshaped the local broadcasting sector, as the broadcasting industry has experienced a tremendous change in distribution. As Elliott (2019) aptly puts it, in the sphere of global geopolitics, the main narrative for Al as elsewhere has been about power—the power to (re)shape the worldwide race in Al-driven cultural and economic growth; therefore, the investigation of the influence of the American platform in the local context provides a better understanding of the power relationship between the Global North and the Global South. Netflix has especially purchased the distribution rights of well-made local content and shown them on Netflix.

For Netflix, while it has penetrated many local markets around the globe, one of its major target local cultural markets is Korea in various ways. Therefore, it is essential to take Korea as an example in Netflix studies. Netflix has indeed developed several strategies to expand its market share in Korea. To begin with, Netflix funded as much as $43 million to Mr. Sunshine—a television drama—, which aired in 2018 in the midst of the company’s vehement drive to increase its control in Korea and, therefore, in Asia (DongA llbo, 2018). Netflix also bought Stranger—a Korean television drama—and Man to Man (another drama released during 2017) to air on Netflix. Netflix also started to broadcast One Spring Night, a mini-series produced by MBC—one of the largest Korean network channels—in May 2019 (Jung, S.M., 2019). Until then, only a few programs produced by cable channels were broadcasted by Netflix, and network channels expressed their deep concerns about the intrusion of Netflix in the Korean broadcasting market. However, domestic broadcasters, both cable and network channels, have faced a challenge from Netflix, and therefore, they have no choice but to work with Netflix as a new distribution and exhibition outlet for their programs, while advancing their own OTT platforms. As a continuation of its interest in Korean dramas, in November 2019, Netflix unveiled a three-year licensing deal with a Korean cable TV network JTBC. Under the partnership, Netflix will secure worldwide streaming rights to about 20 Korean-language drama series titles produced and aired by JTBC. “Netflix appears to be hurrying to further establish itself as a go-to destination for Korean drama—a recognition of the growing global popularity of the genre’s glossy

Netflix transforming global cultural norms 83 hit shows” (Brzeski, 2019). Netflix’s Korean business consequently played a major role in the growth of the company during the COVID-19 era (Li and Yang, 2020).

Netflix has also transformed the exhibition norms. In the Korean broadcasting system, network and cable channels are used to producing drama series that run two episodes per week over two to three months. However, Netflix produces all episodes at the same time so that the customers can watch them together at any time, without waiting for the next episode. As Netflix controls the distribution timing, domestic broadcasters cannot decide their own programs’ air schedules. For example, SBS (Seoul Broadcasting System) broadcasted its new drama series Vagabond that aired between September 20 and November 9 in 2019; however, it was supposed to broadcast in 2018. The premiere date of this blockbuster-style television series was delayed due to a pending deal with Netflix (Rapir, 2019). With a 250 billion won budget, which is one of the largest thus far, the drama looks like a Hollywood action, thriller, and crime genre movie due to heavy gun-battle scenes, which is rare in the Korean broadcasting industry. Korea’s broadcasting sector now has to distribute programs in various ways, including on Netflix.

Meanwhile, in the realm of the distribution and exhibition of films, Netflix is not known for traditional theatrical releases. As the case of Bong Joon-ho’s Okja—a fusion of benign monster movie, action comedy, and coming-of-age fable—already proved, as it was not screened at major theaters, but on Netflix, that “the theater era is slowly coming to an end” (Song, S.J., 2016). In recent years, at a time when people can have a screen with them anywhere, whether in the comfort of their house, the street, the bus, or subway, films are rapidly spreading through monitors and mobile devices instead of theaters. In other words, one of the major impacts created by Netflix is the film distribution approach. With the deepening screen monopoly/ oligopoly issue in Korean cinema, “some art, low-budget and indie films are testing grounds by choosing to be released online and via mobile technologies,” while attempting to air films on Netflix (Song, S.J., 2016).

Netflix has also influenced the storytelling of local dramas. Until now, producers of Korean dramas used to develop an important turning point at the end of each episode so that the audiences would wait with anticipation until the next episode. However, program producers cannot stick to this traditional distribution norm, as they create and release programs on Netflix as well as domestic channels at the same time (You, S.M., 2019). Freedom from the traditional program schedule of classical linear television is the most important motive for audiences to use OTT platforms.

As previously discussed, Korea has been known for its tech-savvy young generations who adopt new technologies faster and on a more enormous scale than in other countries, and the country is at the front line with the continuous growth of smartphone technologies and relevant apps. The number of users of Netflix’s mobile apps has rapidly increased. As many Koreans rely on their smartphones for daily activities, including cultural consumption, Korean audio-visual industries corporations that have learned from Netflix have rapidly developed smartphone-ready television programs and films and released them on smartphones. For example, Watcha Play, which started its service in Korea in 2016, immediately started out as a mobile application based on data and has built its existing platform into an online content streaming service in Korea (Song, S.J., 2016).

In the cultural industry, distribution is a key in connecting production and exhibition, and Netflix has greatly influenced the local cultural industries in that they have developed a new distribution system, differentiating it from the traditional distribution methods. Netflix has fundamentally reshaped the cultural industry, and its role is not limited to the dissemination of cultural products nor the circulation of audio-visual culture, but it functions as a producer with massive capital to shift the contours of the global cultural industry. Netflix has certainly played a key role as a mediator, as the case of Vagabond discussed above proves, instead of a simple intermediary, in the global cultural industries (van Dijck, 2013; Jin, 2019). At a moment when Netflix is gaining footholds in global markets, its global brand offers an implicit counterpoint to anxieties over platform imperialism—American platforms accumulate power and capital by serving as the world’s major conduit for media practice (Jin, 2015; Elkins, 2019). Netflix’s unconventional attempt is the perfect representation of platform imperialism in Korea and elsewhere.

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