Netflix Inc. (NFLX) is expanding rapidly in the markets of India, Japan, Indonesia, and South Korea. Strategies like duplicating content in local languages, creating original content for a specific market, and partnering with telecommunications companies providing mobile Internet services have been facilitating the company to grow its business.
Shares of Netflix declined after the company released its quarterly report with just 2.2 million new subscribers on October 20. The stock fell 3.2 percent over the past month but resumed growth over the past week with a rise of 8.20 percent. At the same time on a year-to-date basis, the stock is up 59.08 percent.
The management and analysts of the company cited the fact that the growth in the number of new subscriptions was a record in the previous two months, as users during the pandemic chose Netflix as an entertainment alternative to closed cinemas.
Netflix does not appear to have any problems expanding its user base, as it announced another price increase by $1 per month for the standard subscription package in the US last week, and by $2 per month for the premium package. Thus, even if the pace of adding new subscribers declines, Netflix’s sales and revenue growth in the current and future quarters would be guided by higher subscription fees, high engagement rates, and very low opt-out rates.
Tony Markowski, Netflix’s Vice President of Development for the Asia-Pacific region, commented on the latest quarterly report, stating that nearly half of the growth in new paid subscriptions came from the Asia-Pacific region-the highest share of all regions.
The inclusion of subtitles and duplication of content in regional languages such as Hindi, Malay, Korean, Japanese, Thai, and Bahasa Indonesian are the reasons for success. In local languages, Netflix also made the app’s interface available. There is no such diversity in any international streaming service, which gives Netflix an important trump card for conquering markets and competing with local companies.
Netflix continues to invest in the production of new original content for particular audiences, in addition to duplicating existing content. Between 2019 and 2020, Netflix spent $400 million developing original content as well as licensing content from other businesses for the Indian market.
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As Netflix sees significant growth potential in the promising Asian markets, the company said it will continue to invest in markets such as India, South Korea, Indonesia, and Japan. The company’s most of the emphasis will likely be on the Indian market which has the second-largest number of Internet users after China scoring about 570 million users and an annual growth rate of about 13%.