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Netflix turns to Asia with Pacific Rim anime, new originals
NETFLIX Inc has brought its cheque book to Asia.
The streaming company announced a slate of 17 new Asian original series during an event in Singapore on Thursday, part of a pipeline of more than 100 projects being produced in the region. The new shows will include nine Indian programmes, its first Thai original and the company's first Mandarin-language series.
Netflix has much riding on the success of those titles in the region, home to more than half of the world's people. While Netflix boasts more than 130 million customers, the vast majority of them live in the US, Latin America and Europe.
Though Netflix does not break out subscribers by region outside the US, researcher Media Partners Asia estimates that the service has yet to surpass two million customers in any Asian market. The company acknowledged that it has a long way to go.
"When you think about the entire world, we're still quite small," chief executive officer Reed Hastings said. Mr Hastings, who co-founded the company 21 years ago, kicked off a two-day press event in Singapore with a brief synopsis of the history of entertainment, as he has done at many events in recent years.
The new titles include a series that is a prequel to Baahubali, the highest-grossing franchise in Indian history, and will involve SS Rajamouli, who directed the films. The company is also making an anime version of the popular Pacific Rim monster movies, and bringing in Taiwanese stars Eugenie Liu and Jasper Liu to appear in Netflix's first Chinese-language series, Triad Princess.
The Asia production boom follows a familiar pattern for Netflix, which spends more cash than it generates by ploughing its growing sales into new programming. The company plans to spend US$8 billion on content this year - and more in the years to come - to build its online video library, though it is unclear how much of the budget will go to Asia.
Investors have accepted the company's cash burn because of their confidence in its ability to sign up as many as 400 million customers worldwide. Netflix shares have climbed more than 70 per cent this year, boosting its market capitalisation past US$140 billion and approaching levels that would rival entertainment giant Walt Disney Co.
Yet investors are bound to be disappointed unless the company has a strong showing in Asia, which is littered with Netflix-like companies already offering vast trove of programs in local languages. Netflix first expanded to Asia in 2015, opening up an office in Japan under the stewardship of Greg Peters, one of Mr Hastings' top lieutenants. The company then expanded to the rest of the region in early 2016.
But one big hole is China, the world's most populous country. The company cannot operate its service there without a local partner, and Mr Hastings has said that Netflix has no plans to enter China any time soon.
Japan, which was Netflix's first Asian foray, no longer appears to be the company's largest market in the region. Growth has been slow, prompting executives to label the country a "slow burn", Netflix did not announce any Japanese original series at the event. Instead, the company unveiled five series in anime, a genre pioneered in Japan that has been catching on all over the world.
India has emerged as the company's biggest market in the region, according to some estimates, as has become the case for US media companies such as 21st Century Fox Inc and Viacom Inc. Netflix released its first Indian original, Sacred Games, earlier this year and plans to announce nine more programmes on Friday.
Highlighting the country's importance, Netflix's Singapore event was dubbed "See What's Next Asia" but more than half of the shows announced hail from India.
Still, Netflix will need to lower prices if it wants to become more popular there. Take Alphabet Inc's YouTube, the most popular video site in the world, which has a competitive advantage in Asia because it is free. YouTube accounts for seven times as much viewing time as Netflix, Mr Hastings said. Earlier this month, Netflix suggested that it may begin to offer lower-priced packages.
"India is the momentum market,'' said Vivek Couto, executive director of Media Partners Asia. BLOOMBERG