Netflix (NFLX) Becomes Profitable in South Korea After Reporting a 125% Rise in Revenue For Its Subsidiary
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Netflix (NASDAQ: NFLX) reported that Netflix Services Korea, its South Korean unit, saw its 2020 revenues explode 125% on a year-over-year (YoY) basis.
Netflix Services Korea recorded full-year sales of $356 million (KRW416 billion) and operating profits of $7.54 million (KRW8.82 billion). Given the rapid rise in demand, Netflix committed to spending nearly $500 million on Korean content this year. For this purpose, the company has also leased two studio facilities to allow production at scale.
“In compliance with the External Audit Law, Netflix has filed our financial statements for the year ended 31 December 2020. We continue to be deeply committed to the Korean creative community and plan to spend nearly KRW 550 billion in 2021,” said a company spokesman.
Previously, Netflix said it has 3.8 million subscribers in Korea. The latest projections from Media Partners Asia forecasts show Netflix could end the year with 5.3 million subscribers in Korea. Moreover, NFLX could see its Korea-based revenues rise by over 50% to $575 million.
Netflix Services Korea operates as a private limited company in Korea, which requires listed companies with assets or annual sales of more than $43 million (KRW50 billion) to make earnings public.
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