Shares in the streaming giant are down 65 per cent over the last 12 months as the world recovers from lockdowns and people spend less time at home.
-- Netflix Inc. is looking to Asia after its shock first-quarter slowdown, seeking to both maintain growth in the one region where it’s still adding subscribers and replicate its success there in other parts of the world.
The world’s biggest streaming platform is at a critical juncture. Shares surged in recent years as subscriber counts boomed, but the company reported its first loss of customers in more than a decade in April and forecasts another contraction this quarter amid fierce competition from rivals. With two-thirds of its market value wiped out since mid-November, Netflix is under pressure to renew a content pipeline that’s lost shine, while cutting costs.
Netflix’s customers in Asia are also some of its lowest-value ones, which means many more subscriptions are required to juice revenue. The pace of revenue growth is already the slowest since records began in 2017 after low-priced mobile-only plans were introduced across Asia and prices slashed in India. Average revenue per membership fell 5 per cent to $9.21 per month in the Asia Pacific, compared with a 5 per cent increase to $14.91 in the U.S. and Canada.
In India, that would require adding 20 million to 30 million subscribers for revenue to be meaningful, he said. The market had about 5.5 million subscribers last year, according to estimates from the consultancy.