about 4 years ago • 2 mins
Netflix, once the undisputed video streaming service par excellence, has been under pressure recently. Late Monday, it released new subscriber growth data in a bid to boost confidence – but are investors still watching? 🧐
Netflix once seemed unstoppable, with runaway subscriber growth setting its share price soaring. But recent results have been decidedly more mixed. The company has added fewer paying users than predicted as it tries to raise rates despite stiffer-than-ever competition – now including the competitively priced Apple TV+ andDisney+.
Recent subscriber growth has been particularly disappointing in Netflix’s largest market. US numbers shrank in July for the first time in a decade – perhaps contributing to the company’s 15% share price drop since. But a new financial filing offers fresh insight into Netflix’s impressive non-US subscriber figures 🕵️♀️
Of 158 million subscribers worldwide, 47 million live in Europe, the Middle East, and Africa – double the number two years ago. And while revenue there has tripled in the same period, that’s nothing compared to Asia-Pacific regional growth: subscribers there are up 150% to 14.5 million, while revenue has more than quadrupled.
Netflix said in its latest earnings that it planned to add 7.6 million new subscribers this quarter. But investors fretting that it would rely on selling cheap overseas subscriptions to net that many may be mollified by Monday’s data. In the high-growth Asia-Pacific region, for example, the average subscription only brings in a couple of dollars less than in the US.
Netflix will now regularly report regional subscriber breakdowns. But greater overseas growth brings fresh challenges. The company has to spend ever more on programming that’s attractive around the world – perhaps $18 billion in 2020. And with HBO Max and Comcast’s Peacockalso joining the US streaming wars, Netflix will also face ever more threats back home. Once the competition settles down, don't expect prices to... 😵
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