Netflix turns eyes to Asia for way out of subscriber growth woes
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Netflix (NASDAQ:NFLX) is looking to its best current growth market to find a path toward reinvigorating subscribers elsewhere.
Investments in the Asia Pacific region will continue to grow even as the company cuts back on overall spending, Netflix's Tony Zameczkowski told Bloomberg.
âAsia is a great proxy for other markets in the world,â said Zameczkowski. âThere 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.â
Asia Pacific makes up 15% of the company's subscription base, and forecasts suggest that a second-half rebound in membership will be driven there, with 79% of new adds set to come from the region.
The impact on revenue is uncertain, though, as Asia customers are among the lowest-valued for Netflix, meaning many more subscribers are needed to move the needle.
Average revenue per member fell 5% in AP (to $9.21 per month), vs. a 5% increase in the U.S. and Canada (to $14.91).
That decline was fed by the introduction of lower-priced mobile-only membership plans across Asia - and while Netflix will continue to offer those lower-end subs, it's also looking for more partnerships with wireless operators and digital payment firms to reach customers in a zone where credit card use is less common, Bloomberg noted.
Netflix stock (NFLX) is down 3.6% Tuesday, and its decline has hit 70% for 2022 after two straight rough earnings reports: Shares fell in January as sub growth disappointed, and collapsed in April as the company actually reported a subscriber decline.