“Vincenzo”, “Squid Game” prove the viability of Asian content for Netflix
The success of Korean series “Vincenzo” and “Squid Game” and Japanese cartoons such as “Attack on Titan” justify Netflix’s heavy spending on Asian movies and TV content.
The streaming giant is expected to grow its revenue in the Asia-Pacific region by 24% in the current year, with subscriber numbers increasing by 20%, according to new research from Singapore-based consultancy Media Partners Asia .
This optimism contrasts with the investment sentiment in January when Netflix announced its data for the December quarter and full year 2021 and spooked the financial community with a cautious (global) outlook for the first quarter.
Media Partners Asia’s latest memo on the company says Netflix could boost APAC revenue by 24% in the current year to December, to $4.1 billion. The number of subscribers is expected to climb 20% to 39.1 million. The strongest growth is in Australia, Japan, South Korea and parts of Southeast Asia.
Japan is expected to generate $1 billion in revenue in 2022; Australia is worth $976 million and Korea $751 million. Southeast Asia will contribute 18% of the regional total, or nearly $750 million, led by Thailand and the Philippines.
Media Partners Asia estimates that Netflix will allocate local content spending of $450 million in Japan, $120 million in Australia and $750 million in Korea. Last year, the company said it would spend nearly $500 million on Korean content in 2021, but it hasn’t publicly offered a figure for the current year.
Considering the exportability of Korean and Japanese content, this type of expense can be justified. Media Partners Asia Says “Netflix’s Economics Will Further Improve [in Asia-Pacific] in 2022.”
“Korean originals and acquisitions had high mobility and impact in 2021,” said Media Partners Asia, led by “Vincenzo” and “Squid Game.” In 2022, out of the ten new titles released in the first quarter (8 series, 2 movies), 7 Korean drama series rank among the top 12 titles in Asian territories measured by MPA’s sister company, AMPD (Korea, South Asia). Southeast, Japan, Taiwan and Australia). This year’s leaders include “We’re All Dead”, “Our Beloved Summer” and “Juvenile Justice”.
Significantly, Korean dramas with weekly episode releases “had a more sustained impact on consumer demand than those with mass episode releases,” the researcher said.
The Netflix-acquired anime can travel across the region, led by “Black Clover.” The original anime has yet to make a significant impact. Some big locals in Japan don’t travel, but the big ones that do are “Demon Slayer” (limited territories) and “Attack on Titan”. Both series released new episodes in the first quarter of 2022.
“Korean dramas and American Netflix Originals are expected to retain their influence well into 2022,” Media Partners Asia said. “With increasing investment, Japanese live action and unscripted Japanese and Korean reality shows could become breakthrough genres in 2022.”
India remains a much more difficult story for Netflix. In order to stay in the game, Netflix has reduced its prices in India by 20-60% on all packages. This had an immediate effect and increased Netflix’s share of streaming minutes viewed in India from 5% of the total to 7%. But it still lags market leader Disney+ Hotstar with 34%.
Media Partners Asia estimates that India will generate the strongest subscriber growth of any APAC market for Netflix in 2022 with 2.2 million net additions, but lower revenue per consumer will flatten revenue growth. It projects $261 million in 2022 versus $236 million in 2021.