New figures from Netflix show that the streaming business is growing fastest in Asia Pacific, where it has tripled subscriber numbers over the past 30 months, while EMEA is the biggest revenue generator outside of North America.
Data released in an SEC filing show at the end of September 2019 Netflix had 158.4 million subscribers around the world, with the bulk of those in North America.
And while the numbers are growing more slowly in a maturing market, the average monthly revenue per subscriber in North America is at least 20% greater than in other markets.
• US & Canada: 67.1 million (+23% March 31 2017 – September 30 2019)
• Europe, Middle East, Africa: 47.4 million (+140%)
• Latin America: 29.4 million (+90.5%)
• Asia Pacific: 14.5 million (+210%)
• US & Canada: $7.38bn (nine months to end September 2019)
• Europe, Middle East, Africa: $3.98bn
• Latin America: $2.05bn
• Asia Pacific: $1.06bn
Average monthly revenue per subscriber
• US & Canada: $12.36 (nine months to end September 2019, +11% year on year)
• Europe, Middle East, Africa: $10.26 (-3%)
• Latin America: $8.21 (-3%)
• Asia Pacific: $9.31 (-1%)
Pricing is likely to become much a sharper issue, given the surge of competitors entering the SVOD market – the Disney+ package, for example, costs $6.99 a month compared to the $12.99 for Netflix’s most popular plan – but chief product officer Gregory Peters told a recent earnings call that he didn’t regards rivals’ pricing as a significant factor in what Netflix charges for its service.
He explained how Netflix is exploring different pricing structures depending on the particular market – one reason it has a $3 mobile-only option in India. “It’s actually performing better than we tested,” he said of the mobile-only plan which will be tested in other markets.
“We’re going to look at other plan structures, other feature value benefits where we might see different market conditions that will work there,” he added.
Netflix as a marketing platform
Some observers think Netflix will at some point have to introduce an ad-supported version, but the company rejects that, saying “We believe we will have a more valuable business in the long term, by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.”
That said, it’s not averse to working with brands. The New York Times noted that only last month sandwich chain Subway began offering a Green Eggs and Ham option (made with spinach-dyed eggs, sliced ham, guacamole, cheese) that tied to a new Netflix show of the same name based on the Dr. Seuss book, putting the Netflix name in front of its customers every day.
The streaming platform has also worked with the likes of clothing company Diesel, electronics brand Samsung and Aviation American Gin, and observers have noted how it is “actively beefing up its marketing team”.
“They’re being more flexible in the types of partnerships they can offer,” said Ellie Bamford, an executive at the R/GA marketing agency.
Such deals could become a potentially significant revenue stream as many brands are anxious to reach a younger generation of cord-cutters who are moving away from traditional linear television. For now, however, Netflix seems content to drive subscriptions through such alliances.
Sourced from SEC, Seeking Alpha, New York Times; additional content by WARC staff