Netflix Continues Overseas-Centered Growth... "The Competition Has Just Begun"

Last Quarter Results: Revenue of $5.47 Billion and Operating Profit of $460 Million Recorded

[Asia Economy Reporter Kum Bo-ryeong] Netflix's growth centered on overseas markets continues.

According to Hanwha Investment & Securities on the 24th, Netflix's fourth-quarter results last year recorded revenue of $5.47 billion and operating profit of $460 million. Compared to the previous year, these figures increased by 30.6% and 112.5%, respectively. Net profit showed a 338.3% increase to $590 million.

Choi Bo-won, a researcher at Hanwha Investment & Securities, explained, "After the launch of Apple TV+ and Disney+ in November last year, subscriber churn to competing services was expected, but the total number of paid subscribers in the fourth quarter increased by 20% compared to the same period last year and by 6% compared to the previous quarter. This is because the increase in subscribers in the U.S. was only 423,000, while overseas net new subscribers reached 8,333,000."

The average revenue per user (ARPU) is also steadily rising. In the U.S. and Canada region, ARPU increased by 1.1% compared to the previous quarter and by 17.2% compared to the same period last year, resulting in streaming revenue in North America increasing by 23.6% year-over-year. In particular, streaming revenues in the EMEA (Europe, Middle East, and Africa), Latin America, and APAC (Asia-Pacific) regions increased by 42.5%, 31.6%, and 51.1%, respectively, compared to the same period last year.

Expectations for overseas growth remain valid. In the first quarter of this year, new seasons of Altered Carbon, Kingdom, and Narcos are scheduled, and the proportion of overseas subscribers is also expanding. Researcher Choi analyzed, "Since ARPU is rising in regions with a high revenue share, short-term top-line growth expectations are considered valid."

However, competition in the online video service (OTT) market is expected to intensify significantly starting this year. Competing services such as HBO MAX and Peacock are scheduled to launch this year. This raises the possibility of subscriber churn in the U.S. Choi said, "In the long term, there is a possibility of slowing overseas revenue growth when competing companies begin expanding overseas."