Netflix Inc is looking to Asia after its shock first-quarter slowdown, seeking to maintain growth in the one region where it is still adding subscribers and replicate its success there in other parts of the world.
Despite plans to curb overall spending, investment in Asia would keep growing, including financing for the production of local films and series, Netflix vice president of business development for Asia-Pacific Tony Zameczkowski said in an interview.
While Netflix would continue to offer low-price, mobile-only membership across Asia, it is also seeking more partnerships with wireless operators and digital payment companies to reach more potential customers in a region where credit card use is less common, he said.
Photo: AFP
The company’s Asia strategy is informing moves in other emerging markets, where the platform must also grow to balance out saturation in North America and Europe.
“Asia is a great proxy for other markets in the world,” Zameczkowski said. “There are similarities between emerging Asia and other emerging markets like Africa and Latin America. Learnings here can be easily replicated or leveraged by those regions.”
The Asia-Pacific region accounts for 15 percent of Netflix’s 221.6 million global subscribers and is forecast to be the biggest driver of further expansion.
After a disappointing start to the year, analysts expect a rebound in the second half would see the company add about 6.8 million members for the whole year, with 79 percent coming from the Asia-Pacific.
Still, the region’s widely differing audiences, preferences and operating environments pose risks. New users in the Asia-Pacific totaled 1.1 million in the first quarter, down 20 percent from a year earlier, and the company has faced cultural and political challenges in penetrating some markets.
The series A Suitable Boy triggered controversy in India in 2020 over a scene showing its Hindu female protagonist kissing a Muslim man, while the company removed a show for Vietnamese audiences after the government said a map in it contravened sovereignty laws.
Netflix’s customers in Asia are also some of its lowest-value ones, which means many more subscriptions are required to juice revenue. The pace of revenue growth is already the slowest since records began in 2017 after low-priced mobile-only plans were introduced across Asia and prices were slashed in India.
Average revenue per membership fell 5 percent to US$9.21 per month in the Asia-Pacific, compared with a 5 percent increase to US$14.91 in the US and Canada.
Netflix also faces keen competition from streaming giants such as Amazon.com Inc and Walt Disney Co, as well as local companies that have made headway into Asian markets.
In Southeast Asia, Viu, owned by billionaire Richard Li (李澤楷), overtook Netflix to become the region’s second-largest streamer last year due to its extensive library of South Korean content and a free subscription tier.
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