Netflix's grip on the Indian entertainment market is tightening. The streaming giant has witnessed a significant rise in subscribers and revenue growth in the country, solidifying its position as a major player.
Fueled by the success of original series like "Heeramandi," "Maharaj," and "Amar Singh Chamkila," Netflix is experiencing a boom in India. According to media reports, India has become the second-largest market for Netflix when it comes to acquiring new paid subscribers in Q2 2024. While Netflix hasn't disclosed specific subscriber numbers for India, a shareholder communication revealed the country ranked third in terms of revenue growth percentage for the quarter.
Globally, Netflix added a staggering 8.05 million subscribers in Q2 2024, with the Asia-Pacific (APAC) region contributing the most, at 2.83 million new members. The Economic Times, citing Media Partners Asia estimates, suggests Netflix has around 12 million paid subscribers in India. Additionally, regulatory filings show Netflix Entertainment Services India's revenue grew by 24% in FY23, reaching Rs 2,214 crore. Net profit also saw a significant jump of 75%, reaching Rs 35 crore.
The APAC region's revenue climbed to a healthy $1.05 billion, reflecting a 14.5% increase year-on-year. This mirrors the global trend, where Netflix's total revenue for the quarter reached $9.56 billion, marking a 16.8% increase compared to the previous year.
It's important to note that, starting Q1 2025, Netflix will no longer report quarterly paid membership additions. The reasoning behind this change lies in the varied pricing tiers across different markets, which can impact the financial contribution of each new member. "We prioritize revenue and operating margin as our main financial metrics, and engagement as a key indicator of customer satisfaction," Netflix previously stated in a shareholder letter.
Several factors are contributing to Netflix's success in India. The company attributes some of its growth to critically acclaimed original titles like Sanjay Leela Bhansali's "Heeramandi: The Diamond Bazaar" and Imtiaz Ali's "Amar Singh Chamkila." Licensed films such as Kiran Rao's "Laapataa Ladies" and Ajay Devgn and Madhavan's "Shaitaan" have also played a role.
"Heeramandi" became a runaway success, garnering a massive 15 million views in the quarter and securing a second season renewal in June. Diljit Dosanjh's "Amar Singh Chamkila" also impressed audiences, pulling in 8.3 million views.
"India's growth reflects a global trend where the right content and product-market fit drive membership growth and engagement," stated Netflix co-CEO Ted Sarandos in a post-earnings interview. This emphasis on content selection and programming highlights its importance in retaining and monetizing subscribers.
With its massive internet user base and growing demand for digital content, India has become a crucial market for Netflix's future expansion. The country also serves as a major content production hub for the streaming giant.
Despite its growth, Netflix faces challenges in India's price-sensitive market, where competitors offer services at significantly lower costs. To address this, Netflix implemented price reductions of 20-60% in December 2021. Additionally, Reliance Industries' joint venture with Disney, combining Viacom18 and Star India's businesses (including JioCinema and Disney+ Hotstar), presents stiff competition.
However, Netflix remains confident in its long-term prospects in India. In April 2023, Sarandos referred to India as a "big prize" due to its vast population of entertainment enthusiasts.
In February, Netflix unveiled its 2024 content lineup for India, featuring 22 titles, including eight films and 14 series. This exciting line-up includes a docu-series on the India-Pakistan cricket rivalry, a limited series on the 1999 Kandahar hijack, and a documentary on rapper Yo Yo Honey Singh. Fan favorites like "Mismatched" (Season 3), "Yeh Kaali Kaali Ankhein" (Season 2), and "Fabulous Lives vs Bollywood Wives" will also return for new seasons. "Kota Factory" Season 3 recently debuted in June.