Despite plans to curb overall spending, investment in Asia will continue to grow, including financing the production of local films and series, Tony Zemzekowski, vice president of business development for Asia Pacific, said in an interview.
whereas Netflix Will continue to offer low-priced, mobile-only subscriptions across Asia, it is seeking greater partnerships with wireless operators and digital payment companies to reach more potential customers in an area where credit card use is less common, They said. The company’s Asia strategy is informing moves in other emerging markets, where the platform must also evolve to balance saturation in North America and Europe.
“Asia is a great proxy for other markets in the world,” said Zemzekowski. “There are similarities between emerging Asia and other emerging markets such as Africa and Latin America. The learnings here can easily be replicated or leveraged by those regions.”
The world’s largest streaming platform is at a turning point. Shares have rallied in recent years as customer numbers jumped, but the company reported its first loss of customers in more than a decade in April and forecast another contraction in the quarter amid fierce competition from rivals. Put it. With two-thirds of its market value eroded since mid-November, Netflix is under pressure to renew a content pipeline that has lost its luster while cutting costs.
The company has already made its way into the Asia Pacific region, but the widespread recession gave it additional impetus to build on the success of South Korean mega-hits such as “Squid Game” and “Hellbound”, which boosted membership.
The Asia Pacific region accounts for 15% of Netflix’s 221.6 million global subscribers and is projected to be the biggest driver of further expansion. After a disappointing start to the year, analysts expect a rebound in the second half, with the company adding about 6.8 million members for the full year, with 79% coming from Asia Pacific.
challenges ahead
Nevertheless, the region’s widely varying audiences, preferences and operating environments pose risks. New users in Asia Pacific totaled 1.1 million in the first quarter, down 20% from a year ago, and the company has faced cultural and political challenges entering certain markets. The series “A Suitable Boy” sparked controversy in India in 2020 over a scene in which a Hindu female protagonist was shown kissing a Muslim man while the company was fired after the government violated sovereignty laws. pulled a show for Vietnamese audiences.
Netflix customers in Asia are also some of its lowest-value subscribers, which means many more subscriptions are needed for Juice revenue. The pace of revenue growth is already at its slowest as lower-priced mobile-only plans were introduced across Asia and reduced prices in India since record launches in 2017. Average revenue per subscription in Asia Pacific fell 5% to $9.21 per month, compared with a 5% increase in the US and Canada to $14.91.
“They’re trying to build a deeper funnel of customers. Unless you have a significant customer base, you can’t increase prices,” said Vivek Kuto, executive director, Media Partners Asia.
Netflix to Amazon.com Inc. And it faces stiff competition from streaming giants like The Walt Disney Co., as well as local companies making headway in Asian markets. In Southeast Asia, billionaire Richard Lee-owned Vue overtook Netflix last year to become the region’s second-largest streamer thanks to its extensive library of Korean content and a free subscription tier.
Kuto said that to offset the steep discounts in prices, Netflix should focus on expanding its user base in high-revenue countries such as Japan and Korea, as well as emerging markets such as Thailand and Indonesia.
He added that in India, 20 million to 30 million customers would need to be added to make the revenue meaningful. According to the estimates of the consultancy, the market had about 5.5 million customers last year.
This will likely be a formidable challenge. While many people in the country still prefer to watch movies in theaters and plays over traditional TV, streaming services rely heavily on live programming to attract subscribers. Even Disney, whose Disney+ Hotstar is one of the major players in the market, is facing a shortage of potential customers after losing the rights to stream the lucrative Indian Premier League cricket matches.
While major competitors have introduced pricing at all levels such as mobile-only plans, Netflix is going beyond that to attract sign-ups through innovative payment methods, such as adding users to their monthly phone bills. Allowing you to include your membership fee or pay through a digital wallet.
Couto said Netflix offers a wider range of payment options than competitors in Asia. According to Netflix, the number of new members signing up using alternative payment methods has more than tripled last year, and these measures have been adopted in other markets following their successful launch in Asia.
Asia could also be part of Netflix’s latest plan to increase revenue through introducing ads. While Zemzekowski said it is too early to tell in which markets the company will launch the new model, he believes it will make the platform more accessible to customers.
“While the company is entering a new phase of slow growth, Asia is very exciting and presents a lot of opportunities,” said Zemzekowski. “We’re just getting started.”
This story has been published without modification in text from a wire agency feed. Only the title has been changed.