Netflix Office
Reaching US$1.03 billion in revenue, Latin America represented the highest year-on-year growth for Netflix in Q2 2022, compared to the other regions of the world, according to a letter sent to shareholders. This represents a year-on-year jump of 16%.
In Q1 2022, growth in Latin America was 14% compared to the first six months of 2021, outperforming all other regions. In UCAN (the USA and Canada), growth was 10%, with losses of -4% in EMEA (Europe, Middle East, and Africa) and -9% in APAC (Asia, Pacific).
Despite that Netflix lost almost a million subscribers in the second quarter of the year in the US, in Latin America the number of paid subscribers remained stable at 39.62 million in the same period, against 39.61 million in the first quarter of the previous year.
Perhaps, given these growing trends, Latin America has become a test base for new Netflix monetization services. The platform is testing two models with Latin American consumers, reported Netflix COO Greg Peters during a video recording for investors.
Netflix revealed in March that it was testing two paid features for sharing accounts in Chile, Costa Rica, and Peru, which consists of an additional cost for its users to share their accounts with people who do not live within the same household. On Monday, the company announced that in those countries it will ask if users want to pay a fee of an unspecified amount to add a new member to the account.
Both features are also being tested in Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic, where users will be asked if they want to pay an additional fee to share an account. The fee will range between US$1.70 in Argentina and US$2.99 in other countries.
“At this point, we are starting to see what actually works for users. We are learning a lot as we employ the models. It’s too early to tell, we have started testing the second model now. But I would say that we are confident, based on what we are seeing, to officially launch next year as we are planning” said Peters.
The pay-to-share account is one of the alternatives Netflix is testing to monetize the service, along with an ad-supported version of the streaming platform.
According to Netflix, companies are interested in advertising on the platform and want to partner with successful streaming titles. They expect advertising will represent a small fraction of revenue initially, but to grow over time.
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