Exclusive data that has predicted Netflix subscriber trends suggests international usage slowed during Q4 (NFLX)
- International usage of the Netflix app wasn’t as strong during the fourth quarter of 2019 as it was in the third, exclusive data from mobile analytics firm SimilarWeb suggests.
- International daily active users on the Netflix app fell an estimated 3% from the previous quarter, and grew less, year over year, than in previous years, the data showed.
- Daily active users dipped in key markets in Latin America, like Brazil and Mexico, and user growth slowed significantly in India.
- Netflix’s international subscriber trends have become a growing focus for investors now that the company is breaking out its revenue and membership by global region.
- Netflix reports earnings for the fourth quarter on January 21.
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Netflix scored another hit before it closed the books on 2019 with the December release of “The Witcher,” which the company said was its second most popular show release of the year, behind only the third season of “Stranger Things.”
The question is whether “The Witcher” — and other Netflix releases from the fourth quarter, like “The Irishman,” “Marriage Story,” and “6 Underground” — will help the streaming company hit its subscriber targets when it posts earnings on January 21.
But the fourth quarter, which is usually one of Netflix’s biggest periods of the year for subscriber growth, may not be as strong this year, data from mobile analytics firm SimilarWeb that was shared exclusively with Business Insider suggests.
Netflix expects to add 7.6 million paid subscribers during the fourth quarter, 13% more than it added during the third quarter. Most of that growth, or about 7 million subscriber additions, is supposed to come from outside of the US.
But mobile daily active user estimates from Similar Web — which can help analyze subscriber trends — suggest that Netflix usage was lower internationally during the fourth quarter than the third, especially in key regions like India, Mexico, and Brazil.
Earlier this year, the same SimilarWeb data predicted Netflix’s second-quarter miss for international subscriber growth, and its rebound during the third quarter.
During the fourth quarter of 2019, international daily active users on the Netflix app fell 3% from the prior quarter, SimilarWeb estimated. Year over year, international daily active users were up 12%, compared to a 141% lift from the fourth quarter of 2017 to 2018.
SimilarWeb estimates average daily active users and other activity on apps and websites, such as the share of users who open the Netflix app each day, through a panel of hundreds of millions of Android phones and tablets globally. It tracks mobile usage of the Netflix app in 30 international regions, including India, Brazil, the UK, and Malaysia, where it has a sample size that makes up a statistically significant portion of the local device population.
While the data from Similar Web doesn’t capture Netflix’s full footprint, it does give insights into what is happening in some of Netflix’s most important international markets.
Estimated daily active users dipped in key Latin American markets like Brazil and Mexico
During the fourth quarter, Netflix’s daily active users fell or were flat quarter over quarter in 12 of the markets that SimilarWeb tracked, including key Latin America markets like Argentina, Brazil, and Mexico.
However, in other smaller but growing countries like Hungary and the Ukraine, daily active users continued to grow.
User growth in the key Latin America markets was also down year over year. SimilarWeb found that Netflix’s daily active users fell 2% from the year before in each of the Latin America markets of Argentina and Mexico, and dropped 5% in Brazil.
Latin America is Netflix’s third largest region by subscribers with 29 million paid subscribers as of September 30, the company reported. But the region hasn’t grown as heartily as regions like Asia-Pacific, and Europe, the Middle East, and Africa, over the past two years.
Members in Latin America also pay the least on average for Netflix each month. Netflix’s average monthly revenue per paying membership is around $8.63 in Latin America compared to $13.08 in the US and Canada, where it has the highest average revenue per paying subscriber.
Netflix has also had trouble maintaining its growth in India
In India, where Netflix recently introduced a lower cost plan to boost its audience, daily active users on the Netflix app fell 11% from the third quarter. Daily active users in India also grew 3% year over year, after rising more than 500% from the 2017 to 2018 period.
That could be because data plans recently got more expensive at some wireless carriers in the country, where most streaming happens on mobile, SimilarWeb pointed out.
“The most notable decline was in India, where, due to wireless carriers significantly increasing their prices in recent months, the already competitive market for streaming services has come under increasing pressure on pricing,” Ed Lavery, director of investor solutions at SimilarWeb, said in a statement.
Still, competitor Amazon Prime Video managed to continue growing its daily active users from the third to the fourth quarters, while Netflix did not.
Netflix recently introduced a cheaper, mobile-only plan in India in an effort to boost subscribers there.
The streaming company’s international subscriber trends are a growing focus for investors now that Netflix will begin breaking out revenue and membership by global region, rather than the broad “domestic” and “international” geographies.
It will report on four regions, starting in the fourth quarter: the US and Canada; Asia-Pacific and Europe, the Middle East, and Africa; Latin America; and Asia-Pacific.
The company re-released in December its quarterly figures from 2017 through September 2019, ahead of shift.