Last week, Netflix announced it has teamed up with Microsoft for its planned ad-based subscription tier, previously revealed earlier this year. The news preceded yesterday’s earnings announcement at Netflix, which reported a second consecutive subscriber dip.
Although APAC accounts for only 15% of Netflix’s 220m+ global subscribers, analysts predict that in the second half of 2022, 79% of new subscribers will come from the region. APAC is playing catch up, with the number of Over-the-Top (OTT = video content broadcast via the internet) viewers in the region predicted to cross the 1bn threshold next year. This is some increase considering the figure stood at 639m just three years ago (2019).
Although APAC accounts for only 15% of Netflix’s 220m+ global subscribers, analysts predict that in the second half of 2022, 79% of new subscribers will come from the region. APAC is playing catch up, with the number of Over-the-Top (OTT = video content broadcast via the internet) viewers in the region predicted to cross the 1bn threshold next year. This is some increase considering the figure stood at 639m just three years ago (2019).
As ever, the situation in APAC - with its many different cultures, languages and regional content requirements - is anything but straightforward, e.g.
Credit card penetration across APAC as a whole is low - standing at 13% in 2021.
APAC is a complex region with a whole range of wireless operators, mobile networks and digital payment companies - adoption rates differ greatly per country.
Less globally known but regionally popular streaming apps such as Viu, one of the biggest services in countries like Singapore and Indonesia, which cater for more local-specific preferences such as K-Dramas.
The ever-present influence of the Chinese market and streaming services from global powerhouses such as Tencent.
Nevertheless, Netflix remains the most popular streaming service across the region and has a lot of runway when it comes to attracting new subscribers with its upcoming ad-based model.
The news is exciting for APAC businesses on a number of fronts, e.g.
Ad-supported streaming becoming more attractive in lower income regions, giving brands and advertisers new audiences to reach with their programmatic advertising stack.
Advertisers having access to premium connected TV inventory.
Brands being able to better tap into cultural moments created by word of mouth, headline generating monster series like Stranger Things, Squid Game and The Witcher.
Adtech companies across the region finding new business opportunities to work with Netflix’s partner of choice, Microsoft, and capitalise on this major streaming industry sea change.
We’re a team who average multiple streaming app subscriptions per person. Also, most of us (the older Buddies are frowning right now) grew up accustomed to free to download apps and SaaS products, which can either entail paywalls or advertising scattered across the user experience. Such mechanics are totally common in gaming, music and other areas of our day-to-day life, like learning a language or a new skill. A big industry shift by a market leader has been somewhat overdue, and we’re most excited about the possibilities this move will create for savvy Adtech businesses across APAC, especially those already invested in the OTT realm.
With Netflix’s ad-supported tier just announced for early 2023, this story will be closely monitored by the region’s marketers over the coming months.