Netflix Looks To Asia To Rebuild Subscriber Base
Netflix is focusing on Asia to arrest its sliding subscription numbers, investing more in the region while cutting costs elsewhere.
Asia remains the one market where Netflix subscribers are growing, and the company will be focusing efforts there, as well as using the region as a testing ground for further global expansion.
“Asia is a great proxy for other markets in the world,” said Tony Zameczkowski, vice president of business development for Asia Pacific.
“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.”
Part of this push will involve creating more original content in the region.
Scanline VFX, a subsidiary of Netflix, will invest A$141 million in a special visual effects facility in South Korea, part of Netflix’ push to create Korean originals after both Squid Game and Hellbound became global smashes.
Seoul’s Ministry of Trade, Industry and Energy Stephan Trojansky hopes this will help turn the country into a production hub.
“Its investment marks the first of its kind in Asia to build facilities for movies’ special effects that utilise virtual reality rendition technology,” the industry ministry said in a press release.
“It will lay the groundwork for South Korea to emerge as an Asian hub for content production based on information and communication technology,” the ministry added.
Netflix has seen more than 70 per cent of its market value wiped out since November, with a massive exodus from the streamer.
Netflix has signalled it expected to shed a further two million subscribers by the end of the June quarter, on top of the 200,000 it lost in the March quarter.
While the Asia Pacific region accounts for 15 per cent of Netflix’s 221.6 million subscribers, they are also the lowest value, paying an average of A$13.35 a month, compared to A$21.61 for US subs.
This is a result of low-priced mobile-only plans introduced across Asia, as well as price cuts in India to compete with Disney +, who owned the Indian Premier League rights.
So, while Asia might be the key to building the subscriber base, Netflix needs another play to refill the coffers.