Asia is a $1 billion business for Netflix (NASDAQ:NFLX), according to recently released data in a filing with the SEC.
Netflix filed an 8-K on Monday, giving investors and the public insight into regional growth for the company. Netflix disclosed in this filing that it crossed the $1 billion mark in revenue in Asia during the first nine months of 2019, posting a 57% growth from $669 million in revenue for the same period last year. The company also said it has 14.48 million subscribers in Asia as of September 30, 2019, up from 9.46 million subscribers from the same time last year nearly triple the 5.8 million subscribers 2017.
“In light of Netflix's growing number of memberships and revenue from outside the United States, this regional reporting is consistent with how it reviews and manages its membership and revenue trends,” Netflix said in its SEC filing.
As some investors are anxious about Netflix's plans to compete in the US and Canada where it faces more and more rivals every year, the company sought to calm nerves by showing that it has solid growth outside this region -- where it has a substantial first-mover advantage over Disney+. This fear is warranted: At the end of the Q3 2019, Netflix had 67.1 million subscribers in the U.S. and Canada, up just 3.6% from the end of last year.
While Asia is the fastest-growing region for the company, it's also the smallest with only 9.1% of the company's subscriber base. Europe, Middle East, and Africa (EMEA) is currently the largest non-US region, with a subscriber base of 47.4 million (29.9%) and revenues of nearly $4 billion as of September 30. Latin America currently has 29.4 million subscribers (18.6%) compared to 24.1 million from the same time last year.
The next challenge for Netflix is to bring per-user revenue from its markets worldwide up to the same level as that in the US and Canada. In Asia -- its fastest-growing worldwide market -- average revenue per user came in at $9.31 which puts it ahead of Latin America, at $8.21, but well behind EMEA at $10.26 and the US and Canada at $10.26.
Internally, Netflix might be disappointed with these results -- while impressive on paper. Recently, the company did a major shakeup of its staff within the region with the departure of former HBO Asia executive Erika North, who spearheaded Netflix's first roster of originals in Taiwan and Southeast Asia. Netflix launched 17 original series from Asia during 2019 in a hope to drive subscriber growth. Although Netflix's investment in content might be tantalizing, considering linguistic and cultural differences throughout the region this means that the market for some series is fragmented thus reducing the economy of scale.
Netflix says that its next quarterly earnings report will be on January 21st, 2020. The company’s stock, which closed Monday at $304.21 per share, is up about 14% on the year.
The post New Netflix Numbers Show the Importance of Asia Growth by Sam Reynolds appeared first on Wccftech.
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