The Indian arm of American streaming service Netflix grew more than 700 per cent during 2018-19, recording revenues of Rs 466.7 crore for FY19 with a net profit of Rs 5.1 crore, according to its filing with the registrar of companies, reports The Economic Times. The Reed Hastings-owned video-on-demand platform had a turnover of Rs 58 crore with Rs 20 lakh net profit in FY18.
To be sure, the Netflix game plan in India is focused on creating local content with mainstream movie names and penetrating deep into mass centres and small towns. This July, the American streaming giant, introduced a mobile-only subscription plan in the country at Rs 199 a month and says it’s been getting good results from the new offering. The Rs 199 plan was Netflix’s first mobile-specific option anywhere in the world and its fourth India plan in addition to the existing basic (Rs 499), standard (Rs 649) and premium (Rs 799) plans.
“Historically, the majority of entertainment content in the world has been produced in Hollywood in the English language,” Greg Peters, chief product officer at Netflix had said at an event in Los Angeles earlier this year. “It’s in that disconnect that we see a tremendous opportunity. We believe that people have always wanted authentic storytelling that is rooted in local culture and that locality actually illuminates the universal themes of the story. And it doesn’t really matter where you live or what language you speak. If we do that well, it’s the stuff great storytelling is made of, and always has been.”
Netflix’s range of partnerships includes one with Dharmatic Entertainment, the digital content arm of Bollywood filmmaker Karan Johar’s company Dharma Productions and Shah Rukh Khan’s Red Chillies Entertainment, for a slate of original films and shows. Apart from big-ticket original Indian web shows like Sacred Games and Bard of Blood, it is also looking at feature films including Johar’s Drive and Guilty, Ajay Devgn’s Tribhanga starring Kajol, horror anthology Ghost Stories, Dibakar Banerjee’s Freedom and Atul Sabharwal’s Class of ’83, produced by Red Chillies.
Netflix still has to grapple with several local and overseas rivals in India such as Disney-owned streaming service Hotstar, Amazon Prime Video, ZEE5, and ALTBalaji, which are luring users with free or low-priced offerings. Further, Disney launches its streaming platform Disney+ this week in the US, whose slate of Marvel and Pixar content will be routed to India through Hotstar in local Indian languages while Apple TV+ is already available to users in the country, albeit sans Indian originals at the moment.
To be sure though, the road ahead is still long for every video streaming platform in India that is looking at cashing in on the country’s rapidly growing online video audience. For one, the OTT (over-the-top) platforms have not exactly cracked the magic formula to make money. The two revenue models — advertising and subscription — both face challenges. Subscription issues start with the platform’s price point while for advertising video-on-demand platforms, the market has not grown to the same extent as the overall online video space. Second, the nature of the online video audience in India is said to be male-dominated with an affinity towards local languages. That, consequently, leads to dark, gritty thrillers and gangster dramas like Sacred Games or Amazon’s Mirzapur, which have limited appeal for female audiences. The third is piracy. As with linear models like movies and television, OTT shows, including Sacred Games, have found themselves available on torrent websites within hours of launch.
“There are many challenges, but we are in investment mode in India. And for a long time, we will be spending more on local content productions than we are getting back. But that is part of having the long-term view,” Netflix founder and chief executive officer Reed Hastings had said on the sidelines of a slate event for the Asia Pacific region last year.
