Until recently, the American version of Netflix has always had the most titles– but not anymore. New data indicates that the Japanese version of Netflix now has 6,340 titles in all. Netflix’s American catalog only has 5,633.

Read on to learn what’s in Netflix’s Japanese on-demand catalog and find out why it’s growing.

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Your Netflix Library Changes Depending On Your Location

Not all Netflix subscribers get the same content. Licensing issues force Netflix to give more content to subscribers in some parts of the world than others.

If you’ve ever tried to log onto Netflix while traveling abroad, you may have noticed that many of your favorite shows were missing. You probably also saw a few titles that you didn’t find while surfing Netflix back home.

Though your subscription fee remains the same no matter where you go, Netflix adds or removes the number of titles that you can access depending on where you log in.

Economic forces

The main reason why some parts of the world get more Netflix content than others boils down to regional differences in demand.

Demand is one of the most important factors that determines the market price of streaming content . Netflix and other streaming services have to pay more to secure the rights to stream high-demand blockbuster films. Arthouse movies, indie films, and documentaries aren’t nearly as expensive because they aren’t usually as popular.

If Netflix calculates that it isn’t worth it to buy the right to stream a movie in the US, it sometimes opts to not buy the movie at all or stream the movie somewhere else instead.

Different cultures, different tastes

Certain regions may want content that is highly unpopular in others.

For example, Netflix didn’t buy the right to stream Twin Peaks: Fire Walk With Me in the United States. It did, however, pay to stream that movie in Japan.

US critics hated the movie Twin Peaks: Fire Walk With Me and hardly anyone showed up to see it when it debuted in theaters back in 1992.

But in Japan, the same movie was a smash hit.

After Fire Walk With Me debuted in Japan, the New York Times reported that theaters showing the movie were giving out Twin Peaks baseball caps, T-shirts and handheld fans. Japan’s largest travel agency even arranged trips that let Twin Peaks superfans visit Snoqualmie, WA– the American city where the movie was filmed.

Even today, the Twin Peaks universe continues to capture Japan’s collective imagination. Twin Peaks creator David Lynch recently recorded this special promotion for Japanese television station WowWow.

Before the advent of streaming video services, differences in regional demand often caught content creators by surprise. But because Netflix can track what its international subscribers like to stream, it can make more informed guesses about what they might want to watch.

Why Is Netflix’s Japanese Catalog Growing So Fast?

Because Netflix is notoriously secretive , it’s hard to tell for sure why Japanese Netflix has overtaken American Netflix. Here are a few clues that may explain the trend.

Japanese broadcasters are reluctant to create streaming services

One possible factor that could explain why Netflix is giving so much attention to Japan could be Japanese broadcasters’ reluctance to adopt streaming video technology.

The Japan Times described the prevailing attitude among Japanese broadcasters. Their executives believe streaming services are bad for business.

Netflix licenses and produces Japanese-language content

Ahead of its Japanese expansion, Netflix inked licensing deals with two key Japanese studios: Fuji Media Holdings and Yoshimoto Kogyo.

Market Realist revealed that these deals were part of a two-pronged plan for Netflix. If it turned out that Japanese people didn’t like Netflix’s English-language content, they’d still be able to watch plenty of Japanese-language shows and movies.

Fuji Media Holdings owns Fuji TV — one of the most popular TV networks in Japan. Yoshimoto Kogyo is an influential entertainment conglomerate that produces many popular Japanese comedy shows and also runs a theme park.

Netflix recently started churning out Japanese originals. Netflix’s Japanese productions / co-productions include titles like Blazing Transfer Students (炎の転校生 REBORN), Terrace House: Boys & Girls in the City, Atelier and Good Morning Call, Hibana: Spark.

If Netflix’s recent moves are any indication, its partnerships with Japanese content creators are paying off.

Netflix just inked deals with 3 anime studios: Production I.G, Bones, and WIT Studio. According to Anime News Network , the new deal will let Netflix stream Japanese anime in 190 different countries.

Japanese streamers like Netflix’s subtitles

Another potential factor that may explain Netflix’s growth in Japan could be the fact that Netflix has a reputation for creating high-quality Japanese subtitles.

Roughly half of the Netflix titles you can get in Japan are English-language films.

I dug into uNoGS data and found that 3,743 titles in the Japanese version of Netflix have Japanese-language audio tracks. Most of the other titles are English-language movies.

The Netflix Tech Blog described how the company analyzed the market for streaming services in Japan back in 2014 and noticed that subscribers of many competing streaming services had complained about the poor quality of their Japanese subtitles.

“At the time [of Netflix’s Japanese launch], we were mindful that other streaming services that were operating in the Japanese market had received criticism for providing a substandard subtitle experience.” – The Netflix Tech Blog

After listening to advice from Japanese language experts, Netflix decided to implement 5 key subtitle features: rubies, boutens, vertical text, slanted text, and “tate-chu-yoko” (horizontal numbers in vertical text).

Despite this, Parrot Analytics found that Orange Is the New Black — Netflix’s most popular original title at the time — had earned an unimpressive 56.05 rating in Japan. The same show scored a 73.11 rating in Spain. Other Netflix originals underperformed in Japan as well, according to the report.

Even though great subtitles haven’t helped Netflix’s core originals spark much interest in Japan, there does seem to be significant demand for other types of English-language films and shows.

54 new movies entered the Japanese version of Netflix in the last 10 days. Roughly 20 of those are English-language films.

The fact that Netflix is still investing in English-language content in Japan seems to suggest that Netflix’s focus on Japanese subtitles may be working.

Conclusion

The main reason why Netflix is making heavy investments in Japan is likely due to the fact that Japanese broadcasters have been reluctant to adopt streaming technologies. This reluctance has created big opportunities for Netflix and other foreign streaming services.

Though Netflix’s original content isn’t very popular in Japan, its better-than-average subtitles seem to give it an edge over other foreign streaming services. Additionally, Netflix’s partnerships with Japanese studios seem to be paying off.