Reverse Innovation: a Squid Game

Most Innovation strategy research focuses on products and multinational business. It is rarely applied to the media sector, perhaps because innovation isn’t seen as separate from the day to day business of making new programmes. But are the same strategies at play here, are there any lessons we can learn from other industries?

Glocalisation of Innovation

Many global companies take what is referred to as a glocalisation strategy to innovation – they R&D and release new products in their main highest-earning ‘home’ market, then when scale reduces cost they try to localise/version the product to deliver in other emerging markets.

While not always labelled glocalisation, the strategy of producing centrally and versioning for specific regions is also widespread in broadcasting.  In terms of the delivery of breakout or innovative content, it effectively describes the approach of the big studios with output for their main territory versioned for others. While for more mainstream content simultaneous release across territories is crucial, to make the most of the impact of buzz on some cross-territory social media platforms, and there will be versioning tweaking to align with local cultural sensitivities.

Reverse Innovation

The  alternate strategy of Reverse Innovation has emerged over the last decade, promoted by Professor Vijay Govindarjan. Instead companies give subsidiaries the autonomy to innovate in emerging markets with the needs and budgets of the local market in mind, and then when proven they look at options to bring this back into the main market. 

In the recently frantic streaming subscriber wars, the regularity of the global release of big films and TV series would appear to be the main strategy, particularly for Disney+, but perhaps for Netflix the strategy is more subtle and there are the hallmarks of Reverse Innovation. Netflix have shown a number of times now, with series like Narcos, Elite and, more recently, Squid Game that they can turn non-English-language shows into global hits/talking points. And this isn’t a result of massive marketing, it is a by-product of their technology and using their content discovery algorithms at a global scale. Not only do they identify audiences open to watching shows from other territories/cultures, but they can also identify that a show is a breaking-through in one territory and quickly push to others to capitalise on the buzz. 

Netflix’s approach also aligns with the reverse innovation thinking in the way these shows are being commissioned, and in their investment in a pipeline for dubbing shows.  Part of their approach to expanding globally has been to commission content for local audiences, with the assumption that a proportion would work for their diverse audience-base in other countries, filling their catalogue and ensuring they wouldn’t have to try to get all of their hits from the much more competitive production markets in Hollywood and the UK.

In the case of Squid Game, Korean execs were given commission autonomy, ensuring the series first and foremost worked for their local audience, and as it proved popular it automatically got a shot at entertaining global audiences. It showed that glocalisation isn’t the only route to creating a global success and even in creative churn of media production there are different routes to innovation.