India's Netflix content Addiction fuels subscriber and revenue surge in Q2 of CY24

Netflix attributed its recent growth in the Indian market to the successes of Sanjay Leela Bhansali’s ‘Heeramandi: The Diamond Bazaar’ and Imtiaz Ali’s ‘Amar Singh Chamkila’. Media reports indicate that Netflix’s subscriber numbers in India have surged, bolstering its global expansion. India has reportedly emerged as Netflix’s second largest market for new paid subscribers added during the second quarter of 2024.

In its shareholder communication, Netflix emphasized that India attained the third-highest revenue growth percentage for the quarter. However, detailed subscriber and revenue numbers for the Indian market were not disclosed.

The Breakdown of Netflix’s revenue

In the second quarter of 2024, Netflix added 8.05 million subscribers worldwide, with 2.83 million coming from Asia-Pacific (APAC) region, which includes India. APAC saw the highest influx of new members.

According to the Economic Times report citing Media Partners Asia estimates, Netflix counted 12 million paid subscribers in India. Regulatory filings indicated that Netflix entertainment Services India experienced a 24 percent revenue growth to reach Rs 2,214 crore in FY23, with net profit rising 75 percent to Rs 35 crore. 

In the APAC region, revenue increased to $1.05 billion, making a 14.5 percent rise from the previous year, while Netflix’s total revenue for the quarter reached $9.56 billion, up 16.8 percent from the previous year.

In April, Netflix revealed plans to discontinue reporting quarterly additions of paid memberships beginning in Q1 2025. This decision reflects the diverse pricing structures across different markets, which can impact the financial outcomes of each new membership differently.

“We prioritize 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.

Factors fueling Netflix’s Expansion in India

Netflix credited titles such as Sanjay Leela Bhanali’s ‘Heeramandi: the Diamond Bazaar’ and Imtiaz Ali’s ‘Amar Singh Chamkila’ for driving its growth, alongside other notable releases. Licensed films like Kiran Rao’s ‘Laapataa ladies’ and the Ajay Devgn and Madhavan-starrer ‘Shaitaan’ also contributed significantly to the platform’s success.’Heeramandi’ achieved the status of Netflix’s most-watched Indian drama series, accumulating 15 millions views in the quarter and earning a renewal for a second season in June. ‘Amar Singh Chamkila’, featuring Dilijit 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-earning interview. He underscored the significance of choosing and programming content to retain and monetize members.

India has emerged as a pivotal market for Netflix’s future growth, doubling as a significant hub for content production in response to increasing digital content demand in one of the world’s largest internet markets.

Price-sensitive, OTT viewership market in India

Despite its expansion, Netflix encounters challenges in India’s market, known for its sensitivity to pricing, where competitors provide services at low rates. In response, Netflix lowered its prices by 20-60 percent in December 2021.

The company is also challenged by strong competition from Reliance Industries’ partnership with Disney, which integrates Viacom18 and Star India’s operations, including JioCinema and Disney+ Hotstar. In April 2023, Sarandos referred to India as a significant enthusiast and expressed optimism about Netflix’s sustained success in the region. 

Netflix’s content strategy for India in 2024

In February, Netflix unveiled its slate of content for India in 2024,showing 2 titles comprising eight films and 14 series. Notable entries include a docu-series exploring the India-Pakistan cricket rivalry, a limited series based on the 1999 Kandahar hijacking, and a documentary spotlighting rapper Yo Yo Honey Singh.

Upcoming releases include new seasons of fan-favorite series like ‘Mismatched’ Season 3, ‘Yeh Kaali Kaali Ankhein’ Season 2, and ‘Fabulous Lives vs Bollywood Wives’. Additionally, the third season of ‘Kota Factory’ premiered last month.