2022 has been an eventful year for the video streaming industry. Following the sector's strong growth at the height of the pandemic, companies such as Warner Bros. Discovery (NFLX -0.92%) have experienced a slowdown in the rate of sign-ups, while Netflix (NFLX -0.92%) has lost subscribers overall.

Netflix has shed more than 1 million subscribers across the U.S. and Canada, though those losses have been mitigated somewhat by growth in other markets. Similarly, Warner Bros. Discovery has lost some 300,000 customers in the U.S., yet managed to add new sign-ups overseas.

Despite the corresponding patterns, Netflix and Warner Bros. Discovery have opted for starkly different content strategies going forward. Here's why Netflix is on a path to success and why Warner Bros. Discovery may regret some of the choices it has made.

Netflix is all-in on overseas content

After Netflix reported its first drop in subscribers for more than a decade, the company announced a handful of plans designed to reignite growth. First, the company said it would begin cracking down on account sharing. Second, it shared plans for an ad-supported tier. Another strategy that the company has embarked upon is investing more heavily in non-U.S. content.

According to Ampere Analysis, Netflix has already commissioned or purchased 97 original first-run TV shows and movies from foreign production companies this year. That compares with 63 films and series from U.S. content makers. Ampere Analysis also notes Netflix now hosts around 30% of European content across all the countries it serves on the continent.

To give some context to those numbers, 60.2% of Netflix's most popular content in Q4 2021 originated in the U.S. The second-most popular region for movies and shows was Asia, which was responsible for 16.6%.

Ultimately, it's not just good for Netflix to invest in foreign-language programming to appeal to non-U.S. audiences -- there's always the prospect that some of that content could cross over to other audiences. Season five of Spanish crime thriller Money Heist drew 148 million global viewing hours in a single week last December, while South Korean hit Squid Game clocked up more than 1.6 billion hours watched in its first 28 days on Netflix.

Warner Bros. Discovery is focusing on its home turf

While Netflix is spending money overseas, Warner Bros. Discovery has been axing non-U.S. projects. Earlier this year, the company shuttered many HBO Max movies and TV shows that it was producing for audiences across Europe. Warner Bros. Discovery also opted to remove some of its regional catalog, saying it would instead license the content to other platforms.

At the time, Warner Bros. Discovery said it was still committed to European audiences, suggesting it would focus on commissioning content from regional partners. It's also worth noting that Warner Bros. Discovery opted to maintain its production facilities in France and Spain, with some speculating that shows and movies in those languages travel well.

However, despite these concessions, it's difficult to see how Warner Bros. Discovery will be able to compete globally without maintaining broad, long-term commitments to non-U.S. creators. After all, should the company find it has a non-English language hit on its hands (again, see Squid Game), the company behind the property will ultimately win the chips when it comes to licensing.

Warner Bros. Discovery does, of course, have a deep library of popular content all of its own. From Batman and Superman to Harry Potter and Bugs Bunny, the company has long had many recognizable characters that transcend language barriers.

But even so, content linked to those properties don't necessarily translate into success: The $200 million Harry Potter film Fantastic Beasts: The Secrets of Dumbledore made just shy of $310 million at the international box office, while Space Jam: A New Legacy earned a touch over $160 million from non-U.S. audiences on its $150 million budget.

For investors looking at which stock to back, Netflix is the obvious choice. As things stand, the U.S. is the largest streaming market in the world, with 78% of consumers accessing at least one service. However, by 2027, streaming penetration in many other parts of the world is expected to catch up. Netflix is instituting a plan to take advantage of that growth, while Warner Bros. Discovery is seemingly hoping its homegrown content will be good enough for everybody.