PremiumNEW DELHI: American video streaming platform Netflix is seeing enthusiasm for OTT (over-the-top) content wear off as several parts of the world open up post the covid-19 pandemic.
The company added only 1.5 million paid memberships globally in the April to June quarter this year, but the APAC (Asia and Pacific) region, parts of which continue to be impacted, represented about two-thirds of its paid net adds in the period at 1.02 million.
The Reed Hastings-owned company had added 3.98 million paid subscriptions in the January to March quarter globally with 1.36 million of these coming from the Asia and Pacific region.
“We don’t see the big spikes in terms of engagement or acquisition…that we saw in the very early days of the pandemic. But on the margin, acquisition is impacted. So, for example, in Q2, when things tightened up a little bit, say, in Brazil or India, we did see some increase in acquisition," Spence Neumann, chief financial officer at Netflix said during the earnings call on Tuesday.
Research firm Media Partners Asia in January this year, said Netflix is estimated to have 5 million subscribers in India with rival Amazon Prime Video commanding 17 million paid users. As per another report by the research firm, Netflix commands 14% of India’s total online video revenue market while Amazon takes up 7%. Netflix does not share country-specific subscriber numbers.
In September 2020, Netflix India partnered with Jio to offer a free mobile-only subscription to post-paid subscribers for plans starting at $5.3 per month ( ₹399). The subscribers were offered the option to upgrade to traditional plans. Netflix is also hard-bundled with Jio’s fixed broadband service with free access to subscribers opting for data plans starting at $20 per month ( ₹1,499).
The streaming platform, in July 2020, started testing a $4.7 per month ( ₹349) ‘mobile plus’ plan in India, which allows single HD streaming on mobile, tablets and laptops. These low-cost strategies, media analysts said, was driving growth.
“We are making sure that we increase the accessibility of the service and our ability to participate in more and more parts of the world’s population that don’t have as much means to pay. As we bring in lower price plan offerings that sort of decrease average revenue per member, we’re also thinking about that from the calculus of expanding the funnel in a way that delivers total net positive revenue," Greg Peters, chief operating officer and chief product officer said during the call, adding that the company launched its mobile plan in 78 countries this quarter. India was the first country to have a mobile-only Netflix plan in July 2019.
Titles like Shadow and Bone, a fantasy series based on the Grishaverse book series, season two of dating show Too Hot to Handle, social experiment reality program The Circle, Zack Snyder’s Army of the Dead and Fatherhood were the standout performers for the company this quarter.
“Covid-related production delays in 2020 have led to a lighter first half of 2021 slate that will build through the course of the year. In the first six months of 2021, content amortization grew only 9% year-over-year (as compared to 17% in FY20). Covid and its variants make predicting the future hard, but with productions largely running smoothly so far, we’re optimistic in our ability to deliver a strong second half slate," the company said in a letter to shareholders. The third quarter will see titles like La Casa de Papel (Money Heist), Sex Education, Virgin River, Never Have I Ever, Sweet Girl and Kissing Booth 3 premiere on the service.
“We’re also in the early stages of further expanding into games, building on our earlier efforts around interactivity (for example, Black Mirror Bandersnatch) and our Stranger Things games. We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV. Games will be included in members’ Netflix subscription at no additional cost similar to films and series," the letter said.
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