Netflix APAC revenues to grow 12% in 2023 to $4 billion

New Delhi: Netflix, the American streaming platform, will see its revenue grow 12% to top $4 billion this year, compared with 9% growth in 2022, while local content investment will reach $1.9 billion, representing 47% of revenue, according to a report by Media Partners Asia (MPA), an independent provider of research, advisory and consulting services across the media and telecoms sectors in Asia Pacific.

Netflix’s revenue growth in 2023 will benefit from a rebound in the Australia market, where its performance will be gradually bolstered by advertising growth, higher-ARPU revenue growth in Japan and Korea, and material gains and contributions from India, Indonesia, the Philippines and Thailand.

“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,” MPA executive director Vivek Couto said in a statement.

India, Indonesia,Thailand and the Philippines will contribute through a mix of subscriber and ARPU growth with impact in the south east Asian markets likely to be felt especially in the second half as these four markets contribute more than 20% in aggregate to 2023 revenues, Couto added.

Netflix’s local content investment will reach $1.9 billion in 2023, representing 47% 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,” Dhivya T, lead analyst and head of content insights at MPA said in a statement. “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,” Dhivya added.

Last year, Netflix released 29 exclusive Korean dramas, of which six 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 two) 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 two), Taiwanese (Mom, Don’t Do That!) and Indonesian (The Big 4) originals had travelability with regional impact in 2022. Amongst Netflix’s top eight revenue-based scale markets in APAC, India and Indonesia will remain the highest growing. Netflix’s monetization in India last year and through 2023 is a result of strong low-ARPU subscriber growth with viewership driven by nine local originals in the fourth quarter of 2022.

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