India hooked to Netflix's content; subscribers and revenue surge in Q2 CY24

The success of Sanjay Leela Bhansali's 'Heeramandi: The Diamond Bazaar' and Imtiaz Ali's 'Amar Singh Chamkila' were among the key titles Netflix credited for its recent growth in Indian market

After the success of ‘Heeramandi’, ‘Maharaj’, and ‘Amar Singh Chamkila’ among others, Netflix’s business appears to be booming in India. Netflix’s subscriber base in India has surged, contributing to its global growth, according to media reports. 

India has reportedly become the second-largest market for Netflix in terms of new paid subscribers added in the second quarter of 2024.

In a communication to shareholders, Netflix highlighted that India ranked third in revenue growth percentage for the quarter. However, specific subscriber and revenue figures for the Indian market were not disclosed.

Netflix’s revenue breakdown

Globally, Netflix gained 8.05 million subscribers during the second quarter of 2024, with 2.83 million from the Asia-Pacific (APAC) region. The APAC region, which includes India, recorded the highest number of new members.

 

According to a report by The Economic Times citing Media Partners Asia estimate, Netflix had 12 million paid subscribers in India. According to regulatory filings, Netflix Entertainment Services India saw a 24 per cent revenue increase, reaching Rs 2,214 crore in FY23, with net profit rising 75 per cent to Rs 35 crore.

The APAC region’s revenue climbed to $1.05 billion, a 14.5 per cent increase from the previous year, while Netflix’s total revenue for the quarter was $9.56 billion, up 16.8 per cent from the prior year.

In April, Netflix announced it would stop reporting quarterly paid membership additions starting from Q1 2025, due to varied pricing tiers across markets, which affect the financial impact of each new membership differently.

“We prioritise revenue and operating margin as our main financial metrics, and engagement as a key indicator of customer satisfaction,” Netflix stated in a previous letter to shareholders.

What’s driving Netflix’s growth in India?

Sanjay Leela Bhansali's ‘Heeramandi: The Diamond Bazaar’ and Imtiaz Ali’s ‘Amar Singh Chamkila’, were some of the titles that Netflix attributed as its growth factors, among others. 

Licensed films like Kiran Rao’s ‘Laapataa Ladies’ and Ajay Devgn and Madhavan-starrer ‘Shaitaan’ also contributed to the platform’s success.

‘Heeramandi’ became Netflix’s most-watched Indian drama series, with 15 million views in the quarter and was renewed for a second season in June. ‘Amar Singh Chamkila’, starring Diljit Dosanjh, garnered 8.3 million views.

“India’s growth reflects a global trend where the right content and product-market fit drive membership growth and engagement,” Netflix co-CEO Ted Sarandos said in a post-earnings interview. He emphasised the importance of content selection and programming in retaining and monetising members.

India has become a crucial market for Netflix’s future expansion, alongside serving as a major content production hub, amidst growing demand for digital content in one of the world’s largest internet markets.

Price-sensitive Indian OTT viewership market

Despite its growth, Netflix faces challenges in India’s price-sensitive market, where competitors offer services at lower prices. In response, Netflix reduced its prices by 20-60 per cent in December 2021.

The company also faces stiff competition from Reliance Industries’ joint venture with Disney, which combines Viacom18 and Star India’s businesses, including JioCinema and Disney+ Hotstar.

In April 2023, Sarandos described India as a ‘big prize’ due to its vast population of entertainment enthusiasts, expressing confidence in Netflix’s long-term success in the country.

Netflix’s content plans for India in 2024

In February, Netflix revealed its 2024 content lineup for India, featuring 22 titles, including eight films and 14 series. Highlights include 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.

New seasons of popular series such as ‘Mismatched’ Season 3, ‘Yeh Kaali Kaali Ankhein’ Season 2, and ‘Fabulous Lives vs Bollywood Wives’ will also be released. The third season of ‘Kota Factory’ debuted last month.