Netflix has the world in its sights. After a recent global expansion that began in 2016, Netflix is now available in nearly 200 countries and territories around the world. China, North Korea, Syria and Crimea are the only four countries where you cannot access Netflix.

Despite this push toward global market dominance, Netflix is struggling in one of the largest potential global markets – Asia. While Netflix subscriptions are growing at a rapid pace worldwide, Asian markets have been slow to adopt the streaming service.

Netflix Is Still Struggling To Penetrate Large Asian Markets

It’s no surprise that Netflix is trying to focus on gaining an international market share. The company currently has roughly 52 million subscribers in the U.S., which means that Netflix is close to hitting its estimated 60 million market limit cap .

Netflix is doing very well on an international scale. Of the subscriptions added in Q2 2014, the majority came from international users – for the first time in the history of the company.

However, most of this growth has been driven by Netflix subscriptions in Europe and English-speaking countries. In Asia, Netflix is still lagging behind.

It’s hard to tell how Netflix is performing in Asia, because the company does not usually release statistics on subscriber growth by country. However, a report by Statista suggests that Netflix currently has 109.25 million subscribers worldwide.

One estimate places total Asian Netflix subscriptions at only 1.5 million. That means that, despite huge monetary investment in the past year, the Asian region still only makes up about 1.3% of Netflix subscriptions.

One reason Netflix may not be doing so well in Asia is their relatively recent expansion into the region. After all, it’s only been about a year and a half since Netflix began offering services in most Asian countries. But that’s not the only reason that Netflix is struggling.

3 Reasons Netflix is Struggling in Asia

Industry experts have put forth a variety of different reasons that Netflix has struggled to gain a hold in the Asian market.

High subscription prices

In India, a Netflix subscription costs around 500rs/month – around $7.7 at current exchange rates. This may not seem like much, but the average Indian citiz e n makes around 270RSI – $4.16 – per day.

That means it costs almost 2 day’s wages for a Netflix subscription. If we take the average daily wage of an American citizen as a comparison, you’d be paying the equivalent of $400.

India has a variety of other streaming services that are more affordable compared to Netflix. Hooq and iFlix both charge around $2-3 per month for streaming video, which makes them much more accessible.

Broadband quality issues

In some Asian countries, there is a strong broadband infrastructure. South Korea, for example, is the most-connected country on Earth and roughly 90% of citizens have access to fast, reliable broadband. Japan boasts a similarly high broadband market penetration rate.

However, countries like India do not have nearly the same broadband infrastructure. Though India has 462 million internet users , only 35% of the total population has access to reliable internet.

Most Southeast Asian countries are behind when it comes to broadband connectivity. It’s estimated that, out of 600 million people in Southeast Asia, only around 50 million have access to reliable broadband service.

Asian streaming services like iFlix and Hooq only offer standard definition streaming– and they are nevertheless extremely popular. Subscribers don’t have access to powerful internet connections, and many have low data caps.

Fewer relationships with local content providers

This is probably one of the biggest reasons that Netflix is not making headway in Asia. The vast majority of Netflix content is in English – not local languages.

Many potential Netflix subscribers are probably more interested in local television and films, as well as other content that’s produced in their own language.

Netflix has already begun producing localized content for South Korea , and the company is looking to sign partnerships with other local content providers in Asia to expand their library of localized content. However, existing streaming services currently have the edge, so it remains to be seen how effective these licensing efforts are for Netflix.

Who is the Competition?

Netflix did not expand into most Asian markets until 2016, but video streaming has been a big business there for nearly a decade. Here’s a quick look at the competition.

Southeast Asia

Currently, HOOQ and iFLIX are the biggest streaming services in Southeast Asia.

HOOQ

HOOQ is based in Singapore, and serves Singapore, as well as Thailand, India, Indonesia, and the Philippines. HOOQ launched in 2015, and already has reached over a million subscribers in the Philippines alone.

HOOQ hosts more than 35,000 hours of content, including Hollywood movies and a large selection of localized content.

A HOOQ subscription costs around $2-$4 a month, depending on the region. Flexible, inexpensive 7-day subscriptions are available as well.

iFlix

iFlix serves more than 5 million subscribers in nearly 2 dozen countries across both Southeast Asia and the Middle East and has partnerships with many major Western studios such as MGM, Disney, and Paramount. Its catalog contains a wide variety of top Western movies and TV shows, as well as localized content from each specific region served.

A subscription to iFlix costs around $2-$3 a month, making it much cheaper than a Netflix subscription.

India

With 1.324 billion people as of 2017, India is a highly-desirable market for Netflix’s international expansion. Spuul and Hotstar are its major players.

Spuul

Founded in 2010, Spuul focuses on Bollywood films in Hindi, Tamil, Punjabi, Malayalam, and a number of languages. The services offers about 1,000 total movies and TV shows, with both free and paid options available.

While more current data is unavailable, Spuul announced that it had 4 million registered users in 2015. That number has likely climbed in the intervening years.

A premium subscription costs Spuul users 150 Rupees per month, or about $2.30 USD. Subscribing unlocks the entire movie catalogue and removes advertisements.

Hotstar

Hotstar was launched in early 2015, and has quickly become a very popular streaming service in India. Hotstar offers Hollywood and Bollywood films, as well as local TV shows, sporting matches and live TV streaming.

With more than 60 million subscribers as of early 2016, and a wide variety of both local content and Western content such as Game of Thrones and Homeland, Hotstar is definitely at the top of the heap when it comes to India’s streaming services.

Some Hotstar content can be accessed for free, but a subscription is still very affordable compared to Netflix. Subscribing costs 199 Indian Rupees, or about $3 USD.

South Korea

Netflix has focused quite a bit of effort on gaining subscribers in South Korea. The streaming giant has picked up the popular Korean show Man X Man , and has produced Okja and several other original Korean films.

Here’s what Netflix’s competition looks like in South Korea.

Viki

Netflix’s largest competitor in South Korea is known for Korean dramas, anime and popular Japanese and Chinese TV shows and movies from around the world.

Viki has more than 40 million active users per month , and reaches users in over 190 countries. Interestingly, it’s one of the few foreign streaming services that is not banned in China.

While the majority of registered Viki users are free users, premium subscriptions are also available for $4.17 USD per month.

Taiwan

Catchplay

Founded in Taipei in 2007, CatchPlay began as a film distribution company. However, the company rolled out a comprehensive web streaming platform in 2016. Now, Catchplay provides streaming services to Taiwan, Singapore, and Indonesia.

Catchplay has deals with Disney, Paramount, and NBC Universal and streams the newest studio releases as soon as they become available. Its catalog is primarily focused on movies, but it also has a small selection of TV shows.

The cost of a Catchplay subscription is $5 a month, which makes it one of the more expensive streaming services in the region.

China

Recently, Netflix has taken a different approach when it comes to China – licensing original content to Chinese streaming giant iQiyi. This deal includes shows like Black Mirror, Mindhunter, and BoJack Horseman.

Though Netflix is not available in China, the market for streaming video is massive. Let’s take a look at some of the biggest Chinese streaming services now.

iQiyi

Because it’s the video-streaming branch of Chinese search engine Baidu, it’s probably not surprising that iQiyi dominates the video streaming market in China.

The company is seeking an $8 billion valuation during an upcoming IPO. For comparison, Netflix was valued at a mere $300 million during its IPO.

iQiyi claims to have 481 million total users – more than 25% of the entire Chinese population. A premium subscription costs around 20 yuan – approximately $3 USD.

Youku Tudou

Youku Tudou is the biggest competitor to iQiyi. This site was purchased by Alibaba.com , in 2015. Since then, Youku Tudou’s catalog has expanded to over 400 live-streaming variety shows, over 4,000 feature films and TV shows from both China and the West. American shows available on the platform include Modern Family, The Walking Dead, and American Idol.

It’s estimated that Youku Tudou has over 580 million total users , and that around 150 million of them are active daily. Most content can be watched for free with ads, but Youku Tudou has around 30 million paying subscribers . Subscribers pay around $2 a month for ad-free viewing and a larger selection of films and TV shows.

Netflix Is Still Expanding, Despite Struggles In Asia

Despite struggling in Asia, Netflix is still growing quickly elsewhere. The company added 5.3 million total new subscribers in Q3 2017, and 4.45 million were in international markets. This added up to a Q3 revenue of $2.98 billion – up from $2.28 billion just last year.

Though Netflix may face an uphill battle in the Asian market, its prospects for growth remain strong. As the company continues to grow and compete for partnerships with local broadcasters, Netflix will likely gain more subscribers in the region.