Netflix (NFLX) is focusing its efforts on India, a country that has historically been difficult for competitors.
Netflix said on Thursday that the country delivered the company’s second-highest net subscriber growth in the second quarter and was also its third-highest revenue growth.
The streaming giant credited its region-specific content strategy and product mix as a key driver in attracting, retaining and monetizing subscribers in the region.
Netflix did not disclose exact subscriber or revenue figures for the Indian market, but revenue from the Asia-Pacific region jumped to $1.05 billion this quarter from $919 million in the same period last year.
“What happened this quarter was continued growth,” Netflix co-CEO Ted Sarandos said on the company’s earnings call, citing the success of shows such as “Heera Mandi,” produced and directed by Sanjay Leela Bhansali, the celebrated Indian filmmaker.
“This is India’s biggest drama series ever,” Sarandos said, adding that original and licensed films such as Kiran Rao’s “Laapataa Ladies” and Vikas Bahl’s “Shaitaan” are also performing well in India.
“we [the content] “Well, we’re producing better shows, improving our product mix and market fit. We’re increasing engagement, growing membership and increasing revenue. It’s the same equation everywhere else,” he said. “As long as we continue to excite our audiences there, there is certainly a lot of room for us to grow in India.”
A woman stands next to the Netflix logo during an event in Mumbai, India, February 29, 2024. (REUTERS/Francis Mascarenhas) (REUTERS/Reuters)
With a population of more than 1.4 billion people, India is a media hub with TV and streaming revenues projected to grow 11% in 2024. That contrasts with much slower growth in other developing countries, according to analytics firm Ampere Analysis.
But it’s a tough market for U.S. media companies to crack: For starters, limited broadband infrastructure makes it hard for companies to connect directly with Indian consumers, who primarily rely on mobile carriers to access streaming services.
Indian consumers also have a relatively low willingness to pay for streaming platforms due to the free, ad-supported model offered by local content providers and rampant piracy.
Two of Netflix’s rivals have recently scaled back their ambitions in India. Disney (DIS) said in February it was merging with Indian telecom giant Reliance Industries, effectively giving up its ownership of the network Star India, giving it a minority stake in the entity.
Two weeks later, Paramount Global (PARA) announced it would sell a 13% stake in Indian media company Viacom 18 to Reliance for about $517 million.
The story continues
But Netflix and fellow tech giant Amazon (AMZN), both of which boast significantly higher free cash flow than traditional media companies, have been able to win over upscale Indian consumers by offering localized content.
“What’s really important in India is the growth of the upper-middle income consumer,” Mihir Shah, vice president at research firm Media Partners Asia, told Yahoo Finance in March. “This is an area where not many tech platforms have entered. [like] Netflix and Prime Video really dominate.”
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her at Yahoo Finance. translatorvisit me on LinkedIn or email me at alexandra.canal@yahoofinance.com.
For the latest stock market news and in-depth analysis, including stock-moving events, click here.
Read the latest financial and business news from Yahoo Finance