Netflix (NFLX) has set its sights on India, a country that has posed challenges for its competitors in the past. In the second quarter, India saw the second-highest net subscriber additions for Netflix and ranked third in revenue growth. The company attributed its success in the region to its localized content strategy and product mix.
While specific subscriber and revenue figures for India were not disclosed, Netflix reported that revenue for its Asia-Pacific region increased to $1.05 billion in the quarter from $919 million in the previous year. Netflix’s 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 audiences in the country.
The Indian market, with a population of over 1.4 billion, is experiencing significant growth in TV and streaming-related revenue, projected at 11% in 2024. However, US media companies have found it challenging to establish a direct relationship with Indian consumers, who often access streaming services through mobile operators due to limited broadband infrastructure. Additionally, Indian consumers have a low willingness to pay for streaming platforms due to free, ad-supported models from local providers and widespread piracy.
Despite these obstacles, 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 moves 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
