Netflix: Average Revenue Per User (ARPU) by Segment 2020

Netflix: Average Revenue Per User (ARPU) by Segment 2020

This article discusses the statistics on Netflix: Average Revenue Per User (ARPU) by Segment 2020. ARPU stands for average revenue per unit or per user. It is computed as follows:

Where, 

Average users/units = (Beginning users/units + Ending users/units)/2

Importance of tracking Average Revenue Per User (ARPU) by segment for Netflix

ARPU helps is a non-GAAP measure of the revenue generated per user/subscriber of Netflix over a given fiscal period. It used to track revenue growth of the company at a micro level and hence is an important growth driver. It is can also be used to find out how well Netflix can monetize its user base.

ARPU by segment as a metric

A relatively higher ARPU would be a positive performance indicator for any segment of Netflix.

Analysis of performance of Netflix based on Average Revenue Per User by segment

The average revenue per unit of the domestic DVD segment stood at $ 31.38 in Q2 FY 2019. This was a marginal improvement from the previous quarter as well as from the same quarter in the previous year. Q2 FY 2019, also marked the highest quarterly ARPU for this segment since Q1 FY 2015.

The domestic streaming segment reported an 11.09% increase in ARPU from the first to the second quarter of FY 2019. Last year, the increase from Q1 to Q2 was just under 3%. Netflix crossed $ 30 ARPU in Q1 FY 2018 for the first time in this segment and has been facing an uptrend since then, except for a slight dip in Q4 FY 2018.

Netflix recorded an ARPU of $ 26.56 in Q2 FY 2019 from its international streaming user base. This ARPU was nearly matched by the $ 26.40 earned in Q2 FY 2018. The company faced a downtrend in Q3 and Q4 of FY 2018, but picked up in Q1 FY 2019.