Mumbai: According to a new report by Ampere Analysis, the Asia-Pacific will be the strongest growth region for Netflix’s ad tier, with one of the largest increases in revenue and the greatest average revenue per user (ARPU) uplift. High tolerance of advertising in the Asia Pacific will see the region generate nearly one billion dollars in ad revenue by 2027. In addition, $574 million will be generated by ad tier subscription fees.

Due to relatively low ad rates, Asia-Pacific will earn a higher percentage of its ad-tier revenue from subscriptions (38 per cent vs. 34 per cent in North America and 30 per cent in Western Europe). A rapid rise in subscribers in the region will see overall ad-tier revenue grow quickly.

Ampere explains that Asian-Pacific viewers are the most positive about advertising, with four in 10 (41 per cent) saying they do not mind ads. The comparative figures are 35 per cent in North America and 24 per cent in Western Europe. Ampere predicts that 22 per cent of users in the region will take the ad tier option. With a 17.6 per cent increase in subscriber growth by 2027, Asia-Pacific will be one of the fastest growing ad income markets.

Globally, Netflix will earn $5.5 billion in annual ad income by 2027, boosted to $8.5 billion a year by ad tier subscription fees. The launch of an ad tier will see Netflix earn $2.2 billion more by 2027 versus a purely subscription-only model, driven by an Arpu uplift combined with a modest increase in the overall subscriber base. Ampere estimates that total customers will be 3.2 per cent higher than they would have been had Netflix not launched an ad tier.

Ampere Analysis analyst Ben French said, "Although not as valuable as the US market, Asia will be a particularly strong region for Netflix’s ad model. The high tolerance of advertising will see the strongest uptake of the ad tier, and although rates charged for advertising are lower than in other regions, strong subscriber growth will ensure Asia remains central to the success of Netflix’s new strategy."