The US subscription video streaming company Netflix has its back against the wall as competitors begin to gain momentum in Southeast Asia.
Disney + Hotstar, an Indian brand subscription video on demand (SVOD) provider, gained 22% of new streaming subscribers in Southeast Asia in Q1 of 2022, adding 2.8 million subscribers to reach a total customer base of 39.5 million.
Disney+ Hotstar reached a milestone as the first SVOD platform to capture 5 million subscribers in Indonesia. Indonesia is seen as an arena for competition, with 17.4 million SVOD subscribers and counting. The SVOD provider is also bound for a fall launch in the Philippines.
On the other hand, Netflix gained 1.1 million subscribers in Asia during the first quarter; however, it lost 1.3 million subscribers in other parts of the world.
Netflix reported its first drop in subscriber count in a decade, causing a reaction from Wall Street on its growth potential facing the challenges of the post-pandemic user fatigue, inflation, and competition. The leading platform’s shares fell 37% to $220.40, losing $50 billion off the company’s market value in April and now trading at $178.93, dropping to almost 65% compared to a year ago.
“Like many of its increasingly cash-strapped customers, Netflix is tightening its belt. In its latest earnings call, Netflix stoked investors’ concerns when it reported a loss of 200,000 subscribers at the start of 2022. Once a dominant force in the subscription video on demand (SVoD) market, Netflix now appears to be in survival mode, working overtime to cut costs.” said Francesca Gregory, Thematic Analyst at GlobalData.
Netflix is presently experiencing a sluggish revenue growth this year, leading them to lay off as many as 300 employees this month. Most of the employees axed were US-based, and cuts have been made in the Asia Pacific, Africa, Europe, the Middle East, and Latin America.
Gregory also mentions that the latest layoffs reflect increasingly strong headwinds in the streaming market, with huge content spending and the rising costs of living for viewers proving impossible to balance for streaming platforms.
In response, Netflix has been conceptualizing and developing ways to turn the tides of declining subscribers. Offering a lower-priced ad tier by the end of the year, clamping password sharing, and enhancing gamification were some ideas formulated. Other competitors of Netflix in Southeast Asia are WeTV and Viu. HOOQ and iflix have crashed out of the streaming wars as they were too focused on English-language content and unable to cater to the region’s localized demand.