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Netflix looks at cheaper plans and more local content to grow in India; over 80% of new subscribers came from outside the US in Q1FY19

Netflix added 9.6 million subscribers in Q1FY19, bringing the total to 148.9 million paid streaming members. Most of this growth – 7.9 million of the net additions in Q1 – came from markets outside the US. Its worth noting that revenue from international streaming overtook US revenue in 2018; for this quarter, Q1 international revenue was $2.3 billion, while US revenue was $2 billion. Total revenue increased 22% year-on-year to $4.5 billion, while subscriber count grew 25% year-on-year. Netflix does not release any country-specific numbers, although its been releasing originals series and films in India. Here’s a look at Netflix’s strategy for India:

Netflix in India: cheaper plans, more local content

Getting new subscribers in India: Netflix said a lower price tier will be important to adding members in India, although its not positive that a mobile-only lower price tier model is the right one for India. Last month, it began testing a mobile-only subscription plan for India at Rs 250 per month, which costs half its existing Rs 500 per month plan. The service is looking to increase its subscriber base in India, a market flooded with video streaming offerings that are substantially cheaper than Netflix’s offering. For instance, India’s largest video streaming service, Hotstar (owned by Disney), last month announced a new ‘VIP’ subscription plan costing Rs 365 annually. The plan includes streaming of Hotstar Specials, originals, IPL matches, Disney shows, and English Premier League matches. Hotstar boasts of 300 million monthly active users only in India.

“We’ll see what the right mix of features is, because there is a bit of a magic to try and get the right set of features at the right price point in a way that the consumer can relate to, right, it has to be sort of natural and intuitive to the consumer that this is what they’re getting. So we’ve got more work to go do there, but it’s something we’re highly focused on and anticipate, we’ll make more progress in [indiscernible].”
– Greg Peters, chief product officer, Netflix

Netflix said its investment in local language content in India is paying back as its seen members and hours increase. Netflix’s chief content officer Ted Sarandos said they were “super encouraged” and “got a lot of viewing in India” for Love Per Square Foot and Sacred Games. “..It just took an incredible position in the zeitgeist where people were talking about and writing about the excitement of a show of the quality of Sacred Games.” Sarandos also said Delhi Crime was getting viewership outside India as well. Netflix on Monday announced another 10 original feature films to be produced in India, all in Indian languages, through tie-ups with established directors and production houses in Bollywood. It has also announced 5 new titles last year. All 15 titles will be released by the end of 2020.

Last month, Netflix’s VP for content Bela Bajaria began to lead the platform’s international non-English TV originals. Last month, Netflix’s VP for content Bela Bajaria began to lead the platform’s international non-English TV originals. She replaced Erik Barmack, who was Netflix’s VP of international originals for Latin America, EMEA and India.

Mobile for subscriber growth worldwide: Further, Netflix is also positive that mobile is increasingly a sound strategy to grow its subscriber base worldwide. “It’s a great place for folks to find out about Netflix, to sign up for the service, even if they’re signing up for the service on mobile and then they’re watching on other devices like the TV, which we see as a common paradigm.” Mobile subscriptions also leads to handset partners and telecom operators preloading and bundling Netflix with subscriptions.

Letter to Shareholders | Earnings call transcript

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    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ