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Forecast: Netflix APAC revenues to grow 12% in 2023

March 6, 2023

A report published by Media Partners Asia (MPA), titled Netflix in the Asia Pacific, predicts that Netflix will grow revenues in the region this year by 12 per cent Y/Y to top $4 billion (€3.7bn), compared with 9 per cent growth in 2022, while local content investment will reach $1.9 billion.

According to MPA, Netflix’s revenue growth in 2023 will benefit from: (1) A rebound in the lucrative but saturated Australia market, where Netflix’s performance will be gradually bolstered by advertising growth; (2) Robust levels of higher-ARPU revenue growth in Japan and Korea; and (3) Material gains and contributions from India, Indonesia, Philippines and Thailand.

MPA Executive Director Vivek Couto said: “The ad tier has seen a slow start in the three APAC markets. Australia is expected to see greater momentum through 2023, helping boost subscribers and revenues 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. India, Indonesia, Thailand and the Philippines will contribute through a mix of subscriber and ARPU growth with impact in the SEA markets likely to be felt especially in H2 as these four markets contribute more than 20 per cent in aggregate to 2023 revenues.”

Netflix’s local content investment will reach $1.9 billion in 2023, representing 47 per cent of revenues, driven by Korea, Japan and then followed by India, Australia and parts of Southeast Asia.

“Netflix’s APAC content investments have global impact,” said Dhivya T, Lead Analyst & Head of Content Insights at MPA. “Leading Japanese series and anime together with Korean dramas and movies as well as movies from Indonesia and India have ranked among the globally top streamed titles over the past 12 months through January 2023. Last year, Netflix released 29 exclusive Korean dramas, of which 6 were among the top 10 reaching titles in APAC in 2022, according to MPA subsidiary AMPD Research. In early 2023, unscripted titles such as Singles Inferno Season 2 and Physical 100 have trended strongly. Netflix’s English global hit originals have also performed well in APAC, led by Stranger Things and Wednesday. Indian (Mismatched Season 2), Taiwanese (Mom, Don’t Do That! – pictured) and Indonesian (The Big 4) originals had travelability with regional impact in 2022.”

Amongst Netflix’s top 8 revenue-based scale markets in APAC, India and Indonesia will remain the highest growing. Netflix’s monetisation in India last year and through 2023 is a result of strong low-ARPU subscriber growth with viewership driven by nine local originals in Q4 2022.

MPA research indicates that password sharing is at its highest in Indonesia, Korea, Philippines, Thailand and India. In Febriary 2023, the company also announced price adjustments in Southeast Asia. The move could further boost subscriber acquisition & upsell in these markets, as well as likely prepare the region for password sharing crackdown in H2 2023.

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