Netflix’s revenue in Asia-Pacific to grow 12 percent to $4B in 2023

Netflix is forecasted to grow its revenue in the Asia-Pacific region by 12 percent in 2023, hitting $4 billion, according to a new report from regional research and analysis firm Media Partners Asia. Performance in Asia’s major economies and population centers has become a vital metric for Netflix as subscriber growth and revenue per user has largely plateaued in North America and Western Europe.

The growth rate forecasted by MPA would represent a sizable uptick from Netflix’s 2022 APAC revenue increase of 9 percent. The research firm also projects that Netflix’s local content spending in the region will reach $1.9 billion, representing 47 percent of revenues.

Media Partners Asia’s analysts see three primary factors driving the gains in the East: A rebound in the lucrative but saturated Australia market, where Netflix’s recently launched ad-supported subscription tier will gradually bolster sales; robust levels of growth in the developed East Asian markets of Japan and Korea, where revenue per user tends to be high; and “material gains and contributions” from the developing markets of India, Indonesia, Philippines and Thailand.

MPA’s executive director Vivek Couto noted that Netflix’s ad tier has gotten off to a slow start in APAC, but said that “Australia is expected to see greater momentum through 2023, helping boost subscribers and revenues in a market where churn has been increasing.”

Japan is seen as particularly critical to Netflix’s prospects in the region, given that the country contributed over a quarter of Netflix’s total APAC revenues in 2023. Couto noted that “Japan will continue to grow as Netflix strives to grow impact with new scripted non-anime shows” produced in the country.

According to MPA’s estimates, India, Indonesia, Thailand and the Philippines collectively will contribute over 20 percent of Netflix’s APAC revenues in 2023. The firm sees the South East Asian nations’ contributions growing more in the second half of 2023, however, “through a mix of subscriber and ARPU growth.”

MPA’s researchers also noted the power of Korean content and Japanese anime in driving growth across the region. In 2022, Netflix released 29 exclusive Korean dramas, of which six were among the top 10 reaching titles in APAC in 2022, according to estimates from MPA subsidiary AMPD Research.

The company’s inhouse research suggests that Korean dramas captured 28 percent of total viewership on Netflix in APAC in 2022, followed by U.S. series with 25 percent, U.S. films with 12 percent, Japanese anime with 10 percent and other English-language content at six percent, followed by other regional content categories with smaller slices of the pie (Southeast Asian content at 5 percent, Chinese-language with 3 percent and Indian at 2 percent).

“Netflix’s APAC content investments have global impact,” said Dhivya T, lead analyst and 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 Jan. 2023.”

“In early 2023, unscripted titles such as season two of Singles Inferno and Physical 100 have trended strongly,” Dhivya added. “Netflix’s English global hit originals have also performed well in APAC, led by Stranger Things and Wednesday. Indian (Mismatched), Taiwanese (Mom, Don’t Do That!) and Indonesian (The Big 4) originals had travelability with regional impact in 2022.”

MPA also noted that Netflix’s coming password-sharing crackdown could bring gains in the APAC region. The firm’s research indicates that password sharing in the East is at its highest in Indonesia, Korea, Philippines, Thailand and India. In Feb. 2023, Netflix also announced price adjustments in Southeast Asia — a move that “could further boost subscriber acquisition and upsell in these markets, as well as likely prepare the region for the password sharing crackdown in second half of 2023.” The Hollywood Reporter