Netflix (NFLX) has made India a priority, a country where its rivals have struggled in the past. India saw the second-highest net subscriber additions for Netflix in the second quarter, and the third highest revenue growth. The company credits its success in the region to its strategy of offering localized content and a diverse product mix.
Although Netflix hasn’t revealed specific subscriber and revenue figures for India, they reported that revenue for their Asia-Pacific region increased to $1.05 billion in the quarter compared to $919 million in the previous year. Netflix co-CEO, Ted Sarandos, highlighted the success of shows like “Heeramandi,” created by renowned Indian filmmaker Sanjay Leela Bhansali, as well as original and licensed films that have resonated with Indian audiences.
India’s market, with a population exceeding 1.4 billion, is witnessing significant growth in TV and streaming revenue, projected to increase by 11% in 2024. However, US media companies have encountered challenges in establishing direct relationships with Indian consumers, who often access streaming services through mobile operators due to limited broadband infrastructure. Furthermore, Indian consumers are hesitant to pay for streaming platforms because of free, ad-supported models offered by local providers and widespread piracy.
Despite these hurdles, Netflix and Amazon (AMZN) have managed to attract higher-income Indian consumers by offering localized content. Both companies have higher free cash flow levels compared to traditional media counterparts, allowing them to make inroads in the Indian market.
In contrast, Disney (DIS) and Paramount Global (PARA) have recently scaled back their ambitions in India. Disney announced plans to merge its network Star India with Indian telecom giant Reliance Industries, while Paramount Global sold its stake in Indian media company Viacom18 to Reliance. These decisions reflect the challenges that US media companies face in the Indian market.
According to Mihir Shah, vice president of research firm Media Partners Asia, the growth of the middle- to higher-income consumer segment in India has been a key factor in the success of platforms like Netflix and Amazon Prime Video. These tech platforms have been able to dominate this segment and offer content that resonates with Indian audiences.
Overall, Netflix’s focus on localized content and strategic approach to the Indian market has positioned the company for continued growth in the region. By understanding the unique preferences and behaviors of Indian consumers, Netflix has been able to capture a significant share of the market and build a loyal subscriber base. As the streaming landscape continues to evolve in India, Netflix’s commitment to providing high-quality, engaging content will be crucial to its success in the region. t
Source: https://finance.yahoo.com/news/netflix-is-doubling-down-on-india-as-its-competitors-back-away-161145191.html
Footnotes:
1. https://finance.yahoo.com/quote/NFLX
2. https://finance.yahoo.com/news/netflix-adds-8-million-subscribers-disappoints-on-revenue-outlook-213713615.html
3. https://finance.yahoo.com/news/disney-had-big-plans-in-india–heres-why-its-pulling-back-100042448.html
4. https://finance.yahoo.com/quote/DIS
5. https://finance.yahoo.com/quote/RELIANCE.NS?.tsrc=fin-srch
6. https://finance.yahoo.com/quote/PARA?.tsrc=fin-srch
7. https://finance.yahoo.com/video/paramount-sells-viacom18-stake-reliance-161616691.html
8. https://finance.yahoo.com/quote/AMZN
9. https://www.yahoo.com/author/alexandra-canal/
10. https://twitter.com/allie_canal
11. https://www.linkedin.com/in/alexandra-canal-83643889/
12. https://finance.yahoo.com/topic/stock-market-news/