Streaming TV services are racing to expand internationally. A tech startup explains how it's helping them comply with local laws and avoid cultural missteps.

  • Tech and data firm Spherex is unveiling technology to help streamers “culturalize” their content.
  • The CEO told Insider about some of the challenges in tailoring content for local markets. 
  • Spherex generates local age ratings and has new tools that help with custom art and personalization.
  • Visit the Business section of Insider for more stories.

International expansion is the next big battleground in the streaming wars, with services like Netflix, Amazon, and Disney Plus racing to acquire and produce more programming that appeals to audiences around the world. 

But the road to global domination is not without potholes. Regional nuances like local content regulations and cultural values can be big barriers for independent and smaller streaming services that want to expand internationally, according to Teresa Phillips, CEO of Spherex, a tech and data company that works with the entertainment industry.

Spherex, which was spun out of enterprise-software company V2 Solutions in 2018, works with entertainment companies including Cinedigm, ViacomCBS, and YouTube to help “culturalize” or tailor content for different cultures and locales, the company said.

It generates and advises on local age ratings for both original and library content. And now the company is unveiling new technology that uses metadata from the more than 25,000 titles it manages to train its algorithms to generate artwork, such as posters and trailers, for different audiences, and offer streaming services the ability to further personalize the content recommendations and discovery on their platforms. 

Even big streaming companies like Amazon Prime Video and Netflix have sparked unforeseen controversies around some of their original series. Amazon Prime Video recently edited and apologized for a scene in its Indian political drama “Tandav” that offended some Hindu nationalist politicians in the country. Netflix also ignited a firestorm in the US last year when some conservative advocacy and other groups were upset by the depiction of the young protagonist in its French coming-of-age film “Cuties” and its promotional materials.

Phillips said Spherex can help companies anticipate these kinds of cultural sensitives when it rates content. She sees a need for these kinds of services now as more content is being “recycled across time and space” in licensing deals. More streaming services are also expanding internationally as Netflix has done, but without the streaming company’s massive infrastructure, legal teams, and local experts. And some local regulators are taking a harder look at the content on streaming services. 

“It’s an arms race right now,” Phillips said. “Everyone is racing to acquire, engage, and retain worldwide. And they don’t know what they don’t know.”

One challenge for many streaming services and distributors that are expanding internationally is simply making sure their content is compliant with local regulations. India, a coveted market for streaming services, recently rolled out stricter rules for streaming and digital content that includes new guidelines around religion, for example. The European Union requires that 30% of all content carried on streaming services in Europe has to come from the region, which forces services there to either license or produce more local content. And the Australian government is considering similar content quotas. 

Phillips said Spherex studies content guidelines closely and has relationships with local regulators to help entertainment companies navigate those issues. She said the company learned a lot about different cultures by examining local age ratings, in particular. 

“Local age ratings are in effect about culture,” Phillips said. “It’s about local audiences and local value systems … and what they think their consumers need to be protected from.” 

Spherex watches TV shows, films, and other content and adds time-coded tags with details on issues that various cultures might be sensitive to, like sex, smoking, violence, religion, and politics. If a studio is releasing a film for pre-teens and teens, and there’s a particular scene that won’t make it past regulators in Germany, Spherex can flag that to the studio before the movie is released and help them understand what changes to make to reach that audience. It also has an API that determines local age ratings for library content.

Of course, some countries censor content for political and other reasons, while other countries emphasize freedom of speech, which complicates matters further. Netflix, for example, blocked an episode of one its shows, “Patriot Act With Hasan Minhaj,” to satisfy the government of Saudi Arabia in 2019. But in 2020, it defended the filmmaker of “Cuties” and did not censor the film despite backlash in the US.

“There is a balance between defending the authenticity of the story and storytelling and being able to be sensitive to local audiences and be compliant with local mores and values,” Phillips said.

Erick Opeka, chief strategy officer at Cinedigm, said the independent distributor is working with Spherex and other localization partners as it expands its streaming operations globally.

Cinedigm licenses content to streaming services like Netflix and Hulu; programs 11 linear channels for free, ad-supported services like Samsung TV Plus and Pluto TV; and operates a collection of standalone streaming services including including Fandor, Screambox, and the faith-based service the Dove Channel. It also acquired in March a streaming service and a tech company in India and said it plans to launch a new streaming platform there with a range of its content.

Opeka said that localization is a challenge in general, including translating captions and dubbing titles in local languages, and understanding formal and informal ratings systems in different regions, such advocacy and educational ratings group Common Sense Media in the US. 

“You need that Rosetta Stone to help transform the metadata, captions, art, language, legal, ratings, content compliance at a local level,” Opeka said. “All of those things, doing them at scale, are incredibly expensive and in the past have been the purview of huge companies like Netflix and others … We’ve started to look at how to use partners and those kinds of tools to be able to do what Netflix and those others do.”

Cinedigm mainly works with Spherex on ratings, Opeka said. Spherex helped rate the programming for Cinedigm’s linear streaming channels, for example. He said the major connected-TV platforms and other free streaming-TV operators usually won’t allow unrated content on their services. Some of Cinedigm’s TV shows and films were unrated because they hadn’t aired locally on TV before. He said Cinedigm has worked with Spherex on about 150 titles so far.

Phillips thinks there are other applications for the metadata Spherex is generating, including in discovery and personalization. She said the time-coded culturally focused data could give streaming services the ability to filter content based on cultural values.

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