BackIndia big on both growth and challenges for Netflix
The Reed Hastings-owned service added 10.1 million paid memberships, with revenues up 25% year-on-year in Q2Netflix foresees only 2.5 million paid net adds globally for Q3 versus 6.8 million in the prior year quarter.
PremiumNEW DELHI: Over four months of covid-19 induced lockdown may have spelt economic doom for the world but American video streaming platform Netflix has reported 22.49 million paid memberships in the Asia Pacific region with 2.66 million net additions in the June quarter. Globally, the Reed Hastings-owned service added 10.1 million paid memberships, with revenues up 25% year-on-year in Q2.
India accounts for around 5 million subscribers according to media experts and research surveys, but it also houses big challenges. The way forward is tough, Netflix admitted in a letter to shareholders as part of its April-June quarter earnings, with the pandemic and pauses in production impacting its competitors and suppliers similarly.
“Given the significant differences between countries in terms of incidence of new cases, availability of testing, government and industry regulations, there is no one-size-fits-all approach. We are now back in production in many parts of the world including Germany, France, Spain, Poland, Italy, and the UK. Current infection trends create more uncertainty for our productions in the US," the letter said. "Parts of the world like India and some of Latin America are also more challenging and we are hoping to restart later in the year in these regions."
In a recent interview with Mint, Monika Shergill, vice-president, content, Netflix India too had admitted the pandemic had caused massive disruption with all production halted in India since mid March. The company, however, had planned in advance and was ready with a slate of 17 titles, she had added. These included a clutch of Bollywood films for direct-to-digital release (Anurag Basu’s comedy drama Ludo, Sanjay Dutt’s Torbaaz, mystery thriller Raat Akeli Hai, satirical comedy Dolly Kitty Aur Woh Chamakte Sitare) and a bunch of web shows such as Mira Nair’s adaptation of A Suitable Boy and Mismatched, a romantic comedy.
The ₹3,000 crore investment over a period of two years quoted by founder Reed Hastings during his last India visit proves Netflix’s commitment to the country, she had added.
“Netflix is slightly late to the party given that the limited stock of ready films is pretty much over," a media analyst said on condition of anonymity referring to big direct-to-digital movie acquisitions made by rivals Amazon Prime Video and Disney+ Hostar previously. “But that’s also because they have always over-indexed on originals and believed that is their calling card. In this case, they don’t have an option because all production is halted."
The challenges don’t end there. Netflix foresees only 2.5 million paid net adds globally for Q3 versus 6.8 million in the prior year quarter.
“We’re expecting paid net adds will be down year over year in the second half as our strong first half performance likely pulled forward some demand from the second half of the year," the letter added.
There is some good news too though. Productions paused for now are likely to lead to big titles arriving in a bunch by the second half of 2021.
“I think the future will see tremendous growth coming from outside the United States. So think of more employees outside the US, more productions, more operations and hopefully, many more members," Gregory Peters, chief operating officer and chief product officer at Netflix said in an earnings conference call.
In Q2, Netflix saw big hits in Never Have I Ever, a young adult dramedy from Mindy Kaling, that 40 million households watched in its first four weeks, unscripted shows like Too Hot to Handle and Floor is Lava, Spike Lee’s Da 5 Bloods, Extraction and The Wrong Missy. Particularly in India, Shergill said local web shows such as Jamtara- Sabka Number Ayega and She, original films like Guilty, Choked and Bulbul have been big hits during the lockdown, as have foreign titles such as Extraction, Old Guard, Money Heist, Never Have I Ever and a host of Korean, Spanish and Japanese content.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
