APAC Region Contributes Over 50% To Netflix’s Global Subscriber Growth

APAC Region Contributes Over 50% To Netflix’s Global Subscriber Growth

SUMMARY

Netflix has added 2.41 Mn global subscribers in the third quarter

Of these new 2.41 subscribers, 1.43 Mn subscribers have come from the Asia-Pacific (APAC) region

The APAC region which includes the Indian market has now 36.23 Mn paid subscribers in total

After two grim quarters and subscriber loss, streaming giant Netflix added 2.41 Mn global subscribers in the third quarter. Of these new 2.41 subscribers, 59% new subscribers or 1.43 Mn subscribers have come from the Asia-Pacific (APAC) region, the highest addition among all of Netflix’s existing markets.

Netflix’s APAC Growth In Numbers

The APAC region which includes the Indian market has now 36.23 Mn paid subscribers in total, as per data shared in Netflix’s shareholder letter. In Q3 last year, the APAC region added 2.18 Mn subscribers.

While the streaming service’s average paid memberships rose 23% year-over-year in Q3, the company said its APAC revenue grew 19%. However, its average revenue per month (ARM) was down 3% year-over-year which was partially driven by lower ARM in India, somewhat offset by higher ARM in Australia and Korea, the company added.

In the third quarter, Netflix reported $889 Mn in revenue for the APAC region, compared to $834 Mn in revenue in the corresponding quarter last year. Overall, the company reported revenue of $7.93 Bn, up 5.9% year over year, and diluted earnings per share of $3.10. It is to be noted that Netflix India reduced prices across all its subscription plans in December 2021.

Considerably, when in the first quarter, the streaming giant lost 200,000 subscribers globally, reporting a loss of subscribers for the first time in a decade, it added 1.09 Mn subscribers in the APAC region. 

“We’re making good progress in APAC where we are seeing nice growth in a variety of markets including Japan, India, Philippines, Thailand, and Taiwan,” the company said in its Q1 shareholder letter.

The Way Ahead

For Q4, Netflix expects to gain 4.5 Mn new streaming customers, compared with 8.3 Mn in the year-earlier quarter. “After a challenging first half, we believe we’re on a path to reaccelerate growth,” the company said in the shareholder letter.

In Q3, Netflix had a robust content pipeline as it released Stranger Things S4, which generated 1.35 Bn hours viewed, The Sandman, season five of Cobra Kai, among others. “We continue to see great success with our non-English programming too,” the company said while mentioning the success of shows such as Squid Game, Sintonia, The Empress. 

“Our goal is to create authentic local stories for members in the home territory, which we also make available globally,” it added further. 

Interestingly, Netflix also spoke about its gaming segment in the letter. While it has 35 games on service currently, it has 55 more games in development.

“With 55 more games in development, including more games based on Netflix IP, we’re focused in the next few years on creating hit games that will take our game initiative to the next level,” the company said. 

OTT Market In India

According to a Deloitte report, the overall OTT space in India is expected to grow at a CAGR of more than 20% to reach $13 Bn−$15 Bn over the next decade. The Subscription Video on Demand (SVoD) market is expected to grow to $2.1 Bn from $0.8 Bn currently over the same period. 

On the other hand, the Advertising-Based Video on Demand’s (AVoD) market size in India is estimated to increase to $2.4 Bn by 2026 from $1.1 Bn currently. 

In India, Netflix competes against the likes of Amazon Prime Video, Disney+Hostar, Voot, ZEE5, SonyLIV, MX Player, among others. While most of these players run on a freemium model, it was widely expected that Netflix would launch its ad-supported model in India as well. However, India did not make place on the list of 12 markets where the ad-tier would be launched.

“We appreciate all the interest in our new Basic with Ads plan. We’re launching in 12 countries only and it won’t be available in India. As we learn from and improve Basic with Ads, we’ll look to launch in more countries over time. In India consumers can choose from our four existing plans,” a Netflix spokesperson said.

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APAC Region Contributes Over 50% To Netflix’s Global Subscriber Growth-Inc42 Media
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