The streaming service has seen a steady improvement in user engagement, quarter-over-quarter, both in films and series
Netflix has seen a 30% growth in customer engagement and 24% revenue growth year-on-year in India
As the content opportunity continues to scale and our ability to access the market and throw those audiences continues to grow, we can do quite well in India: Netflix co-CEO
Although streaming giant Netflix is yet to find soil under its feet in India, the company leadership seems to be optimistic about its growth in the country. The company’s co-CEO, Ted Sarandos recently said Netflix is looking to tap the India opportunity and ready to adjust price and deliver content as per market needs.
“When we get the pricing a little better and more suited to the market, you can see that we can grow revenue, and therefore, we grow engagement. We have to get the content that people just really flip out for,” Netflix co-CEO, Ted Sarandos said during Netflix’s first quarter earnings call.
Earlier in February, Sarandos termed India as ‘the fastest-growing market’ during his India visit. He further said then a better pricing could help to grow its revenue here.
As shared by Netflix co-CEO, the streaming service has seen a steady improvement in its user engagement quarter-over-quarter, both in films and series. Netflix has seen a 30% growth in customer engagement and 24% revenue growth year-on-year in India after it launched a low-priced subscription plan in the country in 2021.
It is important to note that Netflix had lowered its subscription prices across all its plans in December 2021, bringing its lowest plan at INR 149 per month.
“These reductions — combined with an improved slate — helped grow engagement in India by nearly 30 per cent year-on-year while F/X (forex) neutral revenue growth in 2022 accelerated to 24 per cent (versus 19 per cent in 2021). Learning from this success, we reduced prices in an additional 116 countries in Q1,” the company said in its earnings report.
What Worked For Netflix In India
Citing examples, Sarandos said that Rana Naidu is one of the shows that the people are loving all over the country. More importantly, Indian local content is travelling globally more than ever. While movies like RRR did business all over the world, Gangubai was in the hunt for the Best Foreign Language feature, he added.
For success in India, Sarndos said Netflix needs to get the pricing and the payment methods right. Saying India is a big market because of its population of entertainment-loving people, the company needs to have the product that they love, Sarandos noted.
“As the content opportunity continues to scale and our ability to access the market and throw those audiences continues to grow, we can do quite well in India. We are a long way from that, we are still investing against it and I think that we will ultimately do great in India,” the co-CEO reaffirmed.
Netflix’s Challenges In India
The statements come at a time when Netflix was reportedly planning to change its content strategy to focus more on tent-pole films to gain new subscribers and retain existing ones due to the subdued performance of its Indian originals.
The streaming platform cancelled some original shows in the development and shooting stage as it doesn’t see these bets paying off, Mint reported. Add to it, the Indian content budget has also gone down by 35%-40%.
However, its film content including RRR drew over 73 Mn hours of watch time within the first four weeks of its release on Netflix. Similarly, Gangubai clocked more than 50 Mn hours in the first six weeks of its release.
Other than its international rivals such as Amazon Prime Video and Disney+Hotstar, Netflix competes with domestic players including Zee5, and MX Player; in the regional OTT space, Hoichoi and Aha, in India. Further, Netflix has got another cash-heavy big competitor in the market as well, in the form of Jio Cinema.
It is reported that Reliance Jio is planning to release as many as 100 movies and shows on its OTT platform JioCinema over the next 18-24 months. Produced at a cost of well over INR 2,000 Cr, the movies and TV series span various languages and genres. It is important to note that Netflix still has a long way to go in regional language content in India.
According to a report by RBSA Advisors, India’s video OTT market is expected to reach a size of $12.5 Bn by 2030 from about $1.5 Bn in 2021 on the back of access to better networks, digital connectivity and smartphones.