NETFLIX is set to boost its content spending in the Asia-Pacific region to US$1.9 billion (about 8.5 billion) this year on original productions, which includes a second season of global hit series ‘Squid Game’.
The worldwide SVOD leader is projected to up content spending in the region 15% from US$1.65 billion in 2022, according to new data from Media Partners Asia.
The Asia-Pacific region is projected to see a 12% increase in revenue, from US$3.57 billion in the previous year to US$4 billion.
According to the report, Netflix's revenue growth in the Asia-Pacific region will be fuelled by advertising revenue in Australia and higher user revenue in Japan and Korea, with the streaming giant seeing an increase in Asia-Pacific subscribers from 32 million in 2021 to over 38 million in 2022.
“The ad tier has seen a slow start in the three APAC markets,” Vivek Couto, co-founder of MPA, said in the report.
“Australia is expected to see greater momentum through 2023, helping boost subscribers and revenue in a market where churn has been increasing.”
“Japan will continue to grow as Netflix strives to grow impact with new scripted non-anime shows. Japan is critical to Netflix’s prospects in the region with the market contributing over a quarter to the company’s total APAC revenues in 2023,” said Couto.
Japan, which is Asia's second-largest economy, is the streaming service's biggest market in the region, where physical media is still popular despite the emergence of streaming platforms.
While Amazon's Prime leads the streaming market, Netflix has a notable library of anime and original content that could mark growth in the country.
India, Indonesia, Thailand and the Philippines will contribute through a mix of subscriber and ARPU growth with impact in the SEA markets likely to felt especially in 2H as these four markets contribute more than 20% in aggregate to 2023 revenues.”
“Netflix’s local content investment will reach US$1.9 billion in 2023, representing 47% of revenues, driven by Korea, Japan and then followed by India, Australia and parts of Southeast Asia,” the report indicated.
The report contends that Indonesia, Korea, Thailand, India and the Philippines account for the highest penetration of subscriber account sharing — a practice Netflix is aggressively pushing back on.
Last month, Netflix announced a series of subscription price cuts in those five countries, excluding Taiwan, in addition to Bulgaria, Croatia, Ecuador, Guatemala, Iran, Jordan, Kenya, Libya, Slovakia and Yemen. – The Vibes, March 7, 2023
