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Wednesday, July 24, 2024

Asia-Pacific Helps Netflix Reverse Subscriber Loss in Q3

Following the release of Q3 2022 financial results by streaming giant Netflix…

Pradeepthi Kantipudi, Telecom Analyst at GlobalData, a leading data and analytics company, offers her view:

“The Asia-Pacific (APAC) region once again led the subscriber growth for the Netflix with an addition of 1.43 million paid membership subscriptions for the third quarter of 2022 as compared to 1.08 million in the previous quarter. Revenue from APAC grew 19 percent, excluding F/X as average paid memberships rose 23 percent year-over-year (Y-o-Y) to reach $889 million by the end of the quarter.

“Netflix may have benefited from a price cut it implemented in India, one of the largest markets in the region, in December 2021. However, the strategy affected the company’s average revenue per member (ARM) in the region. According to the shareholder letter from Netflix, the price decrease and plan mix resulted in a 3 percent decline in ARM in APAC. This is in line with GlobalData’s India Subscription Video on Demand (SVOD) Forecast (Q2 2022), which reveals that the monthly average-revenue-per-subscription is projected to decline from $1.28 in 2022 to $1.18 by the end of 2027. This decline in ARM in India, however, was partially offset by higher ARMs in Australia and South Korea.

“In what can be viewed as a turnaround, Netflix gained 2.41 million subscribers globally  in Q3 2022 compared to the loss of 970,000 subscribers in the previous quarter. APAC accounts for 16 percent of Netflix’s 223.1 million global subscribers and the scope for further expansion continues to be a major driver for the company. It has hitherto achieved progress in the APAC region and the success of South Korean mega-hits like Squid Game and Hellbound, provided an impetus for the company to build on its strategy of choosing regional content to target wider audience.

“Netflix faces competition from other streaming giants such as Inc. and Walt Disney Co., as well as local players that have made inroads into the Asian markets. For instance, Viu has gained immense popularity in the Southeast Asian market in recent times owing to its extensive library of Korean content and a free subscription tier. In addition to offering widely popular mobile only plans, Netflix is also attracting consumers by offering them novel payment options like letting them pay with their monthly phone bills or through digital wallets.

“Netflix has strengthened its partnerships with mobile telco operators to enable carrier billing and is offering bundled services in a bid to make further inroads in APAC. It is looking to trial ad-supported streaming in low penetration and challenging monetisation markets. The company has also gradually extended its collaborations with broadband and pay-TV operators through attractive packages to reach out to a wider customer base.”


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