India leads in Netflix paid subscriber additions, ranks third in revenue growth for Q2

For Netflix Inc., India added the second-highest number of paid net subscribers in the world in the April-June quarter. The American streaming platform also clocked the third-highest revenue growth in percentage terms in India in the second quarter, it said in an earnings call to announce its Q2 results on Friday morning (India time). 

The company doesn’t disclose country-specific numbers, but said it added 2.8 million new subscribers in the Asia Pacific, and 8.05 million globally, taking its total paid subscriber base to 277.7 million subscribers in Q2. Industry estimates put its India subscriber count at 10-12 million. (Netflix follows a January to December fiscal year.)

Ted Sarandos, co-chief executive, president and director of Netflix, said during the call that the company's success in India was driven by titles like Heeramandi: The Diamond Bazaar, which clocked 15 million views, Amar Singh Chamkila with 8.3 million views, and licensed films such as Laapataa Ladies and Shaitaan.  

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Referring to Sanjay Leela Bhansali's Heeramandi: The Diamond Bazaar as an “incredibly ambitious series” and the platform’s biggest drama series to date in India, Sarandos said its success was complemented by Netflix's original films and licensed films that went live on the plaform following their theatrical releases.

“So, we pick them well, we program well. We improve the product-market fit. We improve engagement, we grow members, we grow our revenue,” he said, adding that India still has plenty of room to grow.

“India's growth is a story that we see playing out very similarly around the world. The product market fit is what drives our ability to attract members, retain them and monetize them as well. So, I feel like what's going on in the quarter has been this ongoing build,” Sarandos said.

New Approach 

To be sure, there has been a visible change in Netflix’s India approach over the past couple of years, according to media experts, with the company making a conscious effort to get its act together. 

In a three-pronged strategy deployed a few years ago, Netflix transformed it's content approach, cut its subscription prices, and partnered with telcos to reach their users. 

For starters, it slashed prices by 18-60% in December 2021 in an attempt to reach more people. Netflix’s mobile-only plan, earlier priced at  ₹199 per month, now costs ₹149. The basic plan, which allows access to all content on any one device, is priced at  ₹199 versus  ₹499 earlier. It also tied up with mobile operators such as Airtel and Jio that offer their subscribers bundled packages.

In addition, the platform has made a conscious attempt to bring out content that appeals to a wider audience. It has released a bunch of critically acclaimed titles in quick succession over the past year, including Trial by Fire, Scoop, Kohrra, Kathal, Guns & Gulaabs and The Romantics. 

In a recent interview with Mint, Monika Shergill, vice-president of content at Netflix India said, "We could’ve reduced prices at any point in our journey. There was a reason we didn’t do that—we wanted to have the right slate for the right audience, and once we got that, we brought the two most important levers (price and content) to draw a wider audience. It was done in a planned way." 

Other than acquisition of big-scale theatrical films like RRR, Animal, Leo and Jawan across languages such as Hindi, Tamil and Telugu, the platform has bolstered its local originals slate featuring mainstream names. 

The change came at a time that rivals like Prime Video and Disney+ Hotstar were not only offering cheaper plans, but also clocking in more local success stories such as Panchayat, The Family Man, The Night Manager and Koffee With Karan, among others.

New Slate

The latest slate, announced at the end of February, follows a similar template. This includes The Great Indian Kapil Show, a comedy special by popular actor Kapil Sharma and Heeramandi: The Diamond Bazaar.

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Heeramandi was the second most watched Hindi language web show across platforms between January to June 2024, according to a mid-year review of web originals in India by media consulting firm Ormax. The third season of Netflix’s Kota Factory ranked fourth on the list, which was topped by Prime Video’s Panchayat.

The Great Indian Kapil Show was the second most watched Hindi unscripted show after JioCinema’s Bigg Boss OTT.

Amar Singh Chamkila, meanwhile, was the most watched Hindi film during this period.

Big Challenges Ahead

That said, critics note that eight years into its India journey, a large chunk of Netflix’s over 10 million paid subscribers still comes through bundled partnerships.

Further, the streamer relies heavily on the acquisition of hit theatrical movies in Hindi and southern languages, which might not be a great idea at a time that stars like Shah Rukh Khan and Ranbir Kapoor do not have films slated for theatres any time soon. 

While they’ve certainly gotten better at marketing, many experts believe Netflix hasn't really seen a breakout original since Sacred Games or Delhi Crime, which were all commissioned by older teams, or something on the lines of Panchayat (Prime Video) or The Night Manager (Disney+ Hotstar). The combined Disney Reliance entity will also have a strong international library.

“Netflix is excelling in capturing India’s affluent market, with over 10 million subscribers who consistently pay more than three times the average industry Arpu (average revenue per user) every month," Mihir Shah, vice-president, Media Partners Asia said in a recent interview to Mint. 

“Its success in acquiring new subscribers is fuelled by a combination of local original shows, digital premieres of blockbuster movies, and expanded telco partnerships, which have driven new additions. However, it’s the platform’s international content that enhances user retention," he added.

Media Partners Asia is an independent provider of research, advisory and consulting services across the media and telecoms sectors in the Asia-Pacific. In 2023, around 70% of content consumption on the platform stemmed from international offerings, Shah had said.

Further, new challenges have arisen in India’s video streaming market, which has seen early signs of consolidation with Reliance Industries and The Walt Disney Co. having joined forces to create an entertainment giant with enough muscle to take on Netflix and Amazon. 

The combined Reliance-Disney streaming entity will be three-four times bigger in terms of total hours of programming than Netflix, and may even look at acquiring niche language-specific entities that are struggling to survive, according to industry experts.

For the April-June quarter, the streaming giant reported a net profit of $2.1 billion and a revenue of $9.6 billion.