Netflix mobile-only subscription plan surpasses initial expectations

Streaming giant added 4.8 million users in Asia-Pacific, which includes India, in one year till September

Netflix, the world’s biggest video streaming company, said its mobile and tablet-only subscription plan, launched exclusively in India in July, has performed well and surpassed the company’s initial expectations.

“We’ve been very, very happy with the mobile plan. It’s actually performing better than we tested,” said Netflix’s Chief Product Officer Gregory K Peters over an earnings conference call on Monday. 

Netflix did not break down the revenue earned from the said plan. After its mobile-only subscription, which is priced at Rs 199 a month, the streaming giant is also said to be testing multi-month subscription plans – a bundle for three-months, six-months and nine-months – for Indian users. Currently, its packs are priced at Rs 499 per month (one device), Rs 649 per month (two devices) and Rs 799 per month (four devices).

India has emerged one of the key markets for Netflix, which is present in 190 countries. For the firm, the Asia-Pacific (APAC) region, which includes India, recorded the highest growth in terms of revenue and memberships across markets, in the quarter ended September 30. It did not share India-specific numbers. Netflix said it had 14.48 million subscribers in APAC as of September-end, up from 9.46 million subscribers in the same period last year. Besides India, APAC includes Indonesia, Thailand, Philippines, Malaysia, Singapore, Vietnam, South Korea, Japan, New Zealand and Australia.

In comparison, the user base in Europe, Middle East, and Africa (EMEA) grew to 47.4 million subscribers from 33.8 million a year ago. In US and Canada, its core market, Netflix had 67.1 million users as of September-end. This is the first time the streaming firm has broken down region-wise user numbers.

The firm reported $1 billion in revenues from APAC in the first nine months of 2019, up from $700 million in the same period last year, and $400 million in the first nine months of 2017.

Revenues at the India unit grew over 700 per cent in FY19 to Rs 467 crore even as it managed to post meagre profits to the tune of Rs 5 crore, according to filings of Netflix India. India numbers do not include content acquisition costs, and hence, may not be the best indicator of performance. Moreover, revenue earned per user in APAC is lesser than it is in other markets. At $9.31 per subscriber, average revenue per user (ARPU) in APAC is less than the $10.26 per user in the EMEA and $12.36 in the United States. 

The figures represent average ARPU over the January-September 2019 period.

Netflix, which launched in India in January 2016, has been aggressively investing in original programming in India to woo users. Its titles, including Sacred Games and Little Things, launched in partnership with media company Pocket Aces, saw good response. Netflix also said it partnered Viacom 18 for another three original series.

In all, Netflix will invest $420.5 million on producing and licensing content in India this year and next, its chief executive officer Reed Hastings had said on December 6.