THE US ENTERTAINMENT PARADOX
Maintaining these large content libraries explains the shift of the US trade balance. US-based streamers export less because they now retain more of their content for exclusive distribution on their own streaming platforms. And they import more because they acquire foreign content in greater quantities than ever before.
For example, Stranger Things is produced by Netflix in the US. As such, it does not show up in export figures. Squid Game, on the other hand, is a Korean export and shows up in US import data.
Moreover, Walt Disney has decided to retain the exclusive rights to its franchises, forgoing licensing sales. In 2020, the company licensed 59 per cent of its scripted series to third parties, 18 per cent in 2021, and only 2 per cent in 2022.
All the US streaming giants license and commission foreign content. Netflix in particular has spent more on international content than US programming since 2024 (US$7.9 billion versus US$7.5 billion). Hence the creation of a paradox: US trade data in audiovisual services reveals a trade deficit, yet the US-based entertainment industry has never been so dominant globally.
There are similar patterns in industries in which US-based multinationals are located at the apex of transnational supply chains. The jeans that Levi Strauss imports from Bangladesh, the trainers that Nike imports from Vietnam, and the car components Ford imports from Brazil all show up in US trade statistics. But these goods are, essentially, American-owned assets.
About 70 per cent of trade involves global value chains (GVC), as raw materials and components cross borders multiple times before being assembled into a final product.
In today’s global economy, the complexity of most products requires companies to cooperate along transnational production networks. As businesses and countries specialise in specific tasks, GVCs are the most efficient way of producing goods and services. The streaming industry simply mirrors these wider patterns.
