US media services provider Netflix is increasing its focus on Asia-Pacific by investing millions of dollars in the region.
Netflix will be pouring in investments into Asia-Pacific (APAC) as it recognized the potential in these markets. During its third quarter earnings report in October, the firm said that almost half of its paid membership growth originated from APAC, the biggest share of any region.
Betting big on APAC
Since 2016, Netflix has been focusing on expanding into international markets, particularly in countries across Asia-Pacific.
In an interview in late October, Tony Zameczkowski, vice president for business development in APAC at Netflix, mentioned that the company placed emphasis on localization as it entered the region.
These localization initiatives include the addition of subtitles and dubbing in regional languages such as Hindi, Malay, Korean, Japanese, Thai and Bahasa Indonesia, as well as making the app interface available in local languages.
Talking to CNBC, Zameczkowski said: "The other thing that we did these past four years is recognizing that this region is primarily mobile first, which is a big difference from any other part of the world."
Meanwhile, mobile-only plans have been offered by Netflix in countries like India, Malaysia, Indonesia, the Philippines and Thailand, at prices below $5 a month. This is opposite the company's premium pricing strategy in markets such as the US where the standard plan costs around $14.
Netflix plans prices increased as content creation expenses grow, and customers will get a notification 30 days prior to the change. Account users will have to pay standard and premium plans $13.99 and $17.99 per month, respectively. Those plans previously cost $12.99 and $15.99, respectively.
Existing Netflix users will get the updated prices on their bill over the next two months, according to the company. Customers will receive a warning 30 days prior to the increase of fees.
Performance and bullish expectations for the markets
The company announced in October that 46% of global paid net adds for the third quarter of 2020 came from APAC, the biggest share of any region.
While Netflix is not accessible in China, it has removed the likes of India and Japan as countries it is aiming to reach. Part of the company’s approach has been to develop shows that appeal to the local audience but still appeal globally.
Examples are Hindi-language drama "Sacred Games" starring high-profile Bollywood actor Saif Ali Khan and Japanese original "The Naked Director."
Netflix had to cut production in many parts of the world due to the coronavirus pandemic which led to the delays in the release of some shows. However, it announced that in its second-quarter earnings report, it had resumed production and was "furthest along" in Asia Pacific.
According to Zameczkowski, Netflix is "very bullish" about the opportunities in the Asian markets. He said: "Markets like Japan, (South) Korea, India, Indonesia are definitely markets where we see significant potential and we will continue to invest in those markets."
The surge in smartphone users and emergence of cheaper internet connection has driven more people to go online in the region, making it a large potential customer base that tech companies can take advantage of.
