Netflix’s ‘Squid Game’ will generate nearly $900 million for the company – despite costing only $21 million to make, reports say

Squid Game copy
‘Squid Game’ has become a global smash hit, with people dressing up to play their own versions of the game around the world. Guiseppe Cacace/Getty Images
  • “Squid Game” will generate just under $US900 ($AU1,213) million in value for Netflix, internal documents show.
  • Bloomberg reported that the documents said the series was watched by a record 132 million people.
  • “Squid Game” cost around $US2.4 ($AU3) million an episode, far less than “The Crown” and “Stranger Things.”

Netflix’s hugely popular TV show “Squid Game” will generate just shy of $US900 ($AU1,213) million in value for the company, according to internal documents seen by Bloomberg.

The documents also revealed that “Squid Game” cost $US21.4 ($AU29) million to produce. At around $US2.4 ($AU3) million an episode, that’s considerably cheaper than some of Netflix’s other big shows.

“Squid Game” has become a global smash hit and Netflix’s most-watched original show, with 132 million people watching at least two minutes. That far outstrips the previous record holder, Bridgerton, which was seen by 82 million people.

The South Korean TV show is about a brutal contest in which highly indebted people compete to win a huge cash prize. The contestants play a number of kids games – but get killed if they lose.

Internal Netflix documents seen by Bloomberg said the show generated $US891 ($AU1,201) million in “impact value.” That’s the metric that Netflix, which operates a subscription model, uses to gauge the financial importance of shows. It suggests “Squid Game” will suck in a large number of subscribers.

At around $US2.4 ($AU3) million an episode, Netflix is getting a very good return on its investment. “The Crown” and “Stranger Things” cost around $US13 ($AU18) million and $US12 ($AU16) million per episode, respectively.

The streaming giant thinks 89% of people who started “Squid Game” watched at least 75 minutes, according to Bloomberg. It thinks 66% of viewers – or 87 million people – finished the series in the first 23 days of it being online.

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Why Netflix has a ‘5-year advantage’ with international shows like ‘Squid Game’ and how its rivals stack up

Netflix did not immediately respond to a request for comment. But an attorney representing the streaming service told Bloomberg: “​​Netflix does not discuss these metrics outside the company.”

Netflix reaped rewards from the pandemic in 2020, as people locked down in their homes binged on shows such as “Tiger King.” But 2021 has been more difficult for the company as governments lifted restrictions and people have found other things to do than watch TV.

Yet, the financial markets have warmed to Netflix in recent weeks, largely due to the success of “Squid Game.” Shares are up more than 6% over the last month. The company is due to report its third-quarter earnings on Tuesday.

“As always, the key number we’ll be watching out is for subscriber growth,” said Sophie Lund-Yates, equity analyst at broker Hargreaves Lansdown.

“The group’s ability to pump out big-hitting content like ‘Squid Game’ may well be moving the dial on this front, but we do wonder what the reopening of the world will have meant for growth.”