On Tuesday, Netflix announced its paying subscribers had fallen globally for the first time since 2011, as the streaming giant reported a net loss of 200,000 subscribers in the first quarter of 2022—and said it expected to lose another 2 million this quarter. Shares plunged over 25% in aftermarket trading on the news.

Netflix lost 640,000 subscribers in the U.S. and Canada, 350,000 subscribers in Latin America, and 300,000 subscribers in Europe, the Middle East, and Africa (EMEA). The pioneer of TV on demand reported growth in only one region: Asia-Pacific, where paying subscribers grew by 1.1 million.

Netflix did not immediately respond to a request for comment. 

Netflix blamed the fall in subscribers in part on its decision to withdraw from Russia, which led to a loss of 700,000 subscribers. If not for that, Netflix says it would have added 500,000 subscribers globally this quarter—which is still a significant slowdown from the 8.3 million subscribers it added last quarter, or the almost 4 million it added this time last year.

If not for growth in Asia-Pacific, Netflix would have reported a loss of 1.3 million subscribers for the first quarter. 

Asia-Pacific has been the engine of Netflix’s growth over the past year. Between Q1 2021 and Q1 2022, subscribers in Asia-Pacific grew by 26%, compared with 7.6% growth in EMEA, 4.5% growth in Latin America, and a mere 0.2% growth in the U.S. and Canada. Netflix entered the Asia-Pacific market later than other regions, expanding to Australia, New Zealand, and Japan in 2015 and the rest of the region (with a few exceptions like China) in 2016. Netflix launched services in Canada in 2010 and in Europe in 2012.

In its letter to shareholders, Netflix said it was “making good progress” in the Asia-Pacific, with “nice growth in a variety of markets including Japan, India, Philippines, Thailand, and Taiwan.”

Following the success of South Korean–made Squid Game—Netflix’s most successful show to date, which the platform previously estimated would generate $900 million in value for the company—Netflix has announced plans to expand its offerings in Asia. According to its recently released earnings, Netflix garnered $7.9 billion in revenue in the first quarter of this year, putting that $900 million of Squid Game money into perspective.

In 2021, Netflix said it would invest $500 million in Korean content, and the platform followed Squid Game with other Korean shows like crime drama Vincenzo and zombie thriller All of Us Are Dead—the latter of which, according to Netflix’s shareholder letter, has already delivered one of Netflix’s top six TV seasons of all time, in terms of cumulative viewing hours. 

Netflix’s investments in Japanese anime are also garnering a global audience, with over half of the platform’s subscribers watching anime in 2021, Kohei Obara, Netflix’s creative director for anime, told The Hollywood Reporter. 

Even as Netflix CFO Spencer Neumann told investors that the company may be “pulling back” on its content spending this year, analysts expect that the platform’s investment in Asia will continue. “Asia is the only place where [Netflix] is seeing growth,” Lee Kihoon, analyst for Hana Financial Group, told Bloomberg.

However, Netflix still faces stiff competition in the region from competing streaming platforms, like Disney-owned Hotstar, and Viu, owned by Hong Kong–based PCCW Media. Netflix had 6.8 million subscribers in Southeast Asia at the end of 2021, compared with Viu’s 7 million and Hotstar’s 7.2 million, according to data from Singapore-based media consultancy Media Partners Asia.