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Date:
January 25, 2023

Localization is Key to Market Growth During a Recession

How to respond to budget cuts and better compete in the global marketplace

Despite governmental and economist statements to the contrary, a review of content-buying companies' Q4 earnings , news reports , think tank analyses , and layoffs suggest that many in the Media and Entertainment (M&E) industry believe a recession is already upon us. Amazon , AMC , Roku , DirecTV, Warner Brothers , and others have responded to the threat by announcing job, budget, and production cuts.

Given the increased competition between distribution platforms and the decline of theatrical distribution, how do companies stay competitive? How do they increase market share with fewer resources devoted to content? How do you cut and grow simultaneously?

We believe the answer lies in the localization of content developed for other markets.

Content Impacts

In the past, studios, television networks, and production companies responded to a recession in several ways:

1. Halt or decline funding of projects

2. Reduce the number of projects being green lit

3. Cancel shows with marginal audience shares/minutes watched

The above are all pure cost-cutting measures. They reduce a wide range of expenses related to the development, production, and distribution of content, which from an accounting perspective, may address the problem. It doesn't feed its subscriber's appetite for new content. That's a real challenge as cutting production expenses may appease executives; fewer shows to watch and lower subscriber numbers due to increased churn will not appease viewers or shareholders.

How Cutting Production Impacts Market Share

Market research indicates consumers want four things from their streaming service:

1. Competitive pricing

2. Access to popular shows/movies

3. An ad-free option, and

4. Original programming

The reduction of the production budget impacts each of these areas. Without a constant supply of popular or original content, ad revenue will be harder to attract, and competitive pricing may become irrelevant because consumers won't see the value in subscribing. Relying on reruns is not the answer because many series reruns are available on numerous linear, OTT, or FAST channels. This undermines the overall value proposition, leading to increased churn rates and declining revenues. Production budgets are trimmed to keep shows in production, but those cuts could manifest in lower story and production quality, neither desirable outcomes.

What Is the Best Option?

Not everyone has this ability, but importing or exporting new content from other countries or cultures is a good option. There are risks here, too, such as choosing the wrong titles, incompatible markets, or cutting corners in the localization process. Recognizing the importance of getting the story, language, and culture right can have big payoffs. Following the bru-ha-ha over the subs and dubs quality of "Squid Game," consumer expectations of accurate language translations, staying true to the original storyline, and cultural integrity are much higher than they used to be. As the last two Best Picture Oscar winners, " Parasite " and " Coda ," prove, audiences are more than willing to deal with subtitles and dubs.

Companies that create shows for non-US markets, such as Netflix , Disney , Amazon Prime , and others, have an advantage in this situation because those films or series are localized for other countries at a fraction of the cost of a new title. For example, in 2022, the cost per series episode ranged from $4M to $30M . The average price of translating a single episode of a 30-minute TV show can start at $10,000 per language and go up depending on the type of content, desired markets, age rating, and story or cultural complexity. It's a deal by comparison.

Then there's the benefit of single languages being spoken or understood in multiple countries. Localizing a title using subtitles, dubbing, or both allows a title to reach much broader audiences. The top five non-English languages include Chinese (1.3B), Spanish (471M), Hindi (342M), Arabic (315M), and Portuguese (232M). The total population across all these languages, including English, is 3 billion. Not all platforms have subscribers in each of these countries. Still, the point is that localization is a way to provide new content to voracious subscribers economically.

If you have titles you'd like to release outside of native markets, Spherex can help you understand the effort required to make that happen. Spherexgreenlight ™ is an AI/ML platform that can provide cultural and regulatory insights for over 200+ countries and territories worldwide. Contact us to learn how we can help your title reach its full potential.

Related Insights

The Global Rules of Content Are Changing

Across the past eight issues of Spherex’s weekly World M&E News newsletter, one theme has become undeniable: regulation, censorship, and compliance are rewriting the rules of global media. From AI policy to platform accountability, from creative freedom to cultural oversight, content creation is now inseparable from compliance.

1. Platforms Tighten Control Through Age and Safety Laws

U.S. states such as Wyoming and South Dakota have enacted age-verification laws that mirror strict internet safety rules already seen in the U.K., signaling a broader legislative trend toward restricting access to mature material.

At the same time, Saudi Arabia’s audiovisual regulator ordered Roblox to suspend chat functions and hire Arabic moderators to protect minors—an example of government-imposed moderation replacing voluntary compliance.

Elsewhere, Instagram’s PG-13 policy update illustrates how platforms are preemptively adapting before new government rules arrive.

2. Censorship Expands — Even as Its Methods Evolve

Censorship remains pervasive but increasingly localized. India’s Central Board of Film Certification demanded one minute, 55 seconds of cuts from They Call Him OG, removing what they considered violent imagery and nudity.

In China, the horror film Together was digitally altered so that a gay couple became straight using AI. Responding to Malaysia’s stricter limits on sexual or suggestive content, censors excised a “swimming pool” scene from Chainsaw Man – The Movie.

Israel’s culture minister threatened to pull funding from the Ophir national film awards after a Palestinian-themed film about a 12-year-old boy won best picture.

3. AI and Content Creation: Between Innovation and Oversight

AI remains both catalyst and controversy. Netflix announced new internal policies limiting how AI can be used in production to protect creative rights and data ownership.

OpenAI’s decision to allow adult content on ChatGPT under “freedom of expression” principles sparked industry debate about whether platforms or creators set the moral boundaries of AI. OpenAI’s CEO Sam Altman emphasized in a statement, the company is “not the moral police.”

Meanwhile, California passed the Digital Likeness Protection Act to combat unauthorized use of celebrity images in AI-generated ads.

4. Governments Target Global Platforms

The Indonesian government is advancing a sweeping plan to filter content on Netflix, YouTube, Disney+ Hotstar, and others using audience-specific content suitability metrics.

At the same time, the U.K. and EU are reexamining long-standing broadcast rules, with Sweden’s telecom authority proposing the deregulation of domestic broadcasting to encourage competition.

These diverging approaches—tightening in one market, loosening in another—underscore the growing fragmentation of global compliance standards.

5. Compliance as Competitive Advantage

The real shift is strategic: companies now see compliance as value creation, not red tape. As Spherex has argued in recent Substack articles, The Hidden Costs of Non-Compliance in Video Content Production and Why Content Differentiation Matters More Than Ever, studios and creators who anticipate regulatory complexity and make necessary edits on their terms while remaining true to their stories can reach more markets and larger audiences with fewer risks.

In other words, understanding compliance early has become the difference between limited release and global scale.

Conclusion

From new age-verification laws to AI disclosure acts and streaming filters, regulation now defines the boundaries of creativity. The next evolution of media will belong to those who can move fastest within those boundaries—leveraging compliance not as constraint but as clarity.

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Spherex Wins MarTech Breakthrough Award for Best AI-Powered Ad Targeting Solution

The annual MarTech Breakthrough Awards are conducted by MarTech Breakthrough, a leading market intelligence organization that recognizes the world’s most innovative marketing, sales, and advertising technology companies. 

This year’s program attracted over 4,000 nominations from across the globe, with winners representing the most innovative solutions in the industry. This year’s roster includes Adobe, HubSpot, Sprout Social, Cision, ZoomInfo, Optimizely, Sitecore, and other top technology leaders, alongside in-house martech innovations from companies such as Verizon and Capital One.

At the heart of this win is SpherexAI, our multimodal platform that powers contextual ad targeting at the scene level. By analyzing video content across visual, audio, dialogue, and emotional signals, SpherexAI enables advertisers to deliver messages at the most impactful moments. Combined with our Cultural Knowledge Graph, the platform ensures campaigns resonate authentically across more than 200 countries and territories while maintaining cultural sensitivity and brand safety.

“Spherex is leveraging its expertise in video compliance to help advertisers navigate the complexities of brand safety and monetization,” Teresa Phillips, CEO of Spherex, said in a statement. “SpherexAI is the only solution that blends scene-level intelligence with deep cultural and emotional insights, giving advertisers a powerful tool to ensure strategic ad placement and engagement.”

This recognition underscores Spherex’s commitment to building the next generation of AI solutions where cultural intelligence, relevance, and brand safety define success. The award also highlights the growing importance of cultural intelligence in global advertising. As audiences consume more content across borders and devices, brands need solutions that go beyond surface-level targeting to connect meaningfully with viewers. SpherexAI provides that bridge, empowering advertisers to scale campaigns that are not only effective but also contextually relevant and culturally respectful.

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YouTube Thumbnails Can Get You in Trouble

Here’s Why Creators Should Pay Attention

When we talk about content compliance on YouTube, most people think of the video content itself — what’s said, what’s shown, and how it’s edited. But there’s another part of the video that carries serious consequences if it violates YouTube policy: the thumbnail.

Thumbnails aren’t just visual hooks — they’re promos and they’re subject to the same content policies as videos. According to YouTube’s official guidelines, thumbnails that contain nudity, sexual content, violent imagery, misleading visuals, or vulgar language can be removed, age-restricted, or lead to a strike on your channel. Repeat offenses can even result in demonetization or channel termination. That’s a steep price to pay for what some may think of as a simple promotional image.

The Hidden Risk in a Single Frame

The challenge? The thumbnail is often selected from the video itself — either manually or auto-generated from a frame. Creators under tight deadlines or managing high-volume channels may not take the time to double-check every frame. They may let the platform choose it automatically. This is where things get risky.

A few seconds of unblurred nudity, a fleeting violent scene, or a misleading expression of shock might seem harmless in motion. But when captured as a still image, those same moments can trigger YouTube’s moderation systems — or worse, violate the platform’s Community Guidelines.

Let’s say your video includes a horror scene with simulated gore. It might pass YouTube’s rules with an age restriction. But if the thumbnail zooms in on a blood-splattered face, that thumbnail could be removed, and your channel could be penalized. Even thumbnails that are simply “too suggestive” or “misleading” can get flagged.

Misleading Thumbnails: Not Just Clickbait — a Violation

Another common mistake is using a thumbnail that implies something the video doesn’t deliver — for example, suggesting nudity, shocking violence, or sexually explicit content that never appears in the video. These aren’t just bad for audience trust; they’re a clear violation of YouTube’s thumbnail policy.

Even if your content is compliant, the wrong thumbnail can cause very real problems.

The Reality for Content Creators

It’s essential to recognize that YouTube’s thumbnail policy doesn’t exist in isolation. It intersects with other rules around child safety, nudity, vulgar language, violence, and more. A thumbnail with vulgar text, even if the video is educational or satirical, may still result in age restrictions or removal. A still frame with a suggestive pose, even if brief and unintended in the video itself, can be enough to get flagged.

And for creators monetizing their work, especially across multiple markets, the risk goes beyond visibility. A flagged thumbnail can reduce ad eligibility, limit reach, or cut off monetization entirely. Worse, a pattern of violations can threaten a channel’s long-term viability.

What’s a Creator to Do?

First, you need to know how to spot the problem and then know what to do about it. Second, you need to know if the changes you make might affect its acceptance in other markets or countries. Only then can you manually scrub through your video looking for risky frames. You can review policies and try to stay up to date on the nuances of what YouTube considers “gratifying” versus “educational” or “documentary.” But doing this at scale — especially for a growing content library — is overwhelming.  

That’s where a tool like SpherexAI can help.

A Smarter Way to Stay Compliant

SpherexAI uses frame-level and scene-level analysis to flag potential compliance issues — not just in your video, but in any frame that could be selected as a thumbnail. Using its patented knowledge graph, which includes every published regulatory and platform rule, it will prepare detailed and accurate edit decision lists that tell you not only what the problem is, but also for each of your target audiences. Whether you're publishing to a single audience or distributing globally, SpherexAI checks your content against YouTube’s policies and localized cultural standards.

For creators trying to grow their brand, monetize their work, and stay in good standing with platforms, that kind of precision can mean the difference between success and a takedown notice.

Want to know if your content is at risk? Learn how SpherexAI can help you protect your channel and optimize every frame — including the thumbnail. Contact us to learn more.

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