Netflix’s global growth story in 3 charts

Since 2017 Netflix has provided its shareholders (and anyone else who cares to look) a breakdown of its top line metrics by business region.

However, most of the coverage of the company’s Quarterly Earnings tends to focus on global totals (a record $8.8bn revenue from 260m paid memberships last quarter) without drilling in to the regional trends driving the top line.

Below are three charts which use the regional data to tell the story of Netflix’s global growth since 2017.

1.) Paid memberships: growth in EMEA and Asia Pacific have made up for a slowdown in the Americas

At the end of the first quarter of 2017, the US & Canada accounted for 58% of Netflix’s paid memberships. By the final quarter of 2024, that had dropped to 31%.

This was primarily a result of blockbuster growth outside the US & Canada. Europe, the Middle East & Africa (EMEA) led the charge, more than quadrupling subscribers, from 20m in Q1 2017 to 89m in Q4 2023. Coming from a lower base, Asia-Pacific membership increased almost ten-fold - from to 4.6m to 45m - whilst, Latin America added 30m memberships, mostly pre-pandemic.

It was also partly a result of Netflix hitting saturation point with its ad-free subscription offer in the US & Canada. After 3 years of healthy (5%-12%) year-on-year growth, memberships flatlined between Q2 2020 and Q1 2023. The recent crackdown on password sharing, coupled with the launch of an ad-supported tier and a stronger content slate have returned the US & Canada to growth.

Meanwhile, membership growth in Asia-Pacific and EMEA currently shows no signs of slowing down, although some of the more mature SVOD markets within Europe, such as the UK, are definitely starting to see plateau or slight decline (see BARB’s latest Establishment Survey).

2.) Membership additions/losses: the pandemic, the password sharing crackdown and the introduction of an ad tier raised all boats in 2020 and 2023 but 2022 demonstrated how easily growth can turn to decline in mature markets

Charting up membership additions and losses by quarter highlights the huge impact of the first wave of the pandemic on driving new memberships across regions in Q1 & Q2 2020 (+26m memberships) and the positive impact of the rollout of paid sharing and an ad-tier across regions in 2023 (+29m).

It also shows the company’s rocky start to 2022 in almost all regions*, when content production delays, price increases (from $15.49 to $19.99pm in the US), increased competition and consumer spending caution created a perfect storm for churn, exacerbated by withdrawing the service from 700k Russian subscribers in Q2.

*Asia-Pacific managed to remain net positive throughout.

3.) Average revenue per membership (ARPM): multiple price rises in the US & Canada have increased ARPM by a remarkable 70% whilst other regions continue to rely more on membership growth to drive revenue

Average revenue per membership hasn’t changed that dramatically outside of the US & Canada over the last 7 years. It’s climbed $2 in EMEA, $1 in Latin America and dropped by $1.50 in Asia-Pacific.

In the US & Canada it’s increased by almost $7 - from under $10 to almost $17. The step change in ARPM in the quarter following price rises (which took place in Q1 2019, Q4 2020 and Q1 2022 in the US) is very evident - around a $1 bump each time.

How much more they can squeeze the North American orange - a market that’s had decades of paying through the nose for cable - will be interesting to see.