Netflix co-chief executive officer Ted Sarandos sees India as a 'big prize' because of its enormous population of entertainment-loving people.
"We are doing the creative part and we are getting the pricing better and there's always lots of promise to continue to grow in India," Sarandos says in the company's earnings call. "We got to get the pricing and the payment methods right."
The streaming giant witnessed 24% revenue growth in India in 2022 compared with 19% in 2021 after it slashed subscription prices in the country by 20-60% in December 2021, according to its regulatory filing. These reductions helped increase engagement in India by nearly 30%.
India is a very specific market, they like local content, but also you are seeing their local content is travelling more than ever, says Sarandos.
"When we get the pricing a little better more suited to the market, you can see that we can grow revenue, and therefore, and we grow engagement. We have to get the content that people just really flip out for," he says.
Sarandos says the company has seen a steady improvement both in its films and series in India. "Rana Naidu now is a great show that we just released — the people are loving all over the country and it causes a great deal of excitement for the service," he says.
The Netflix co-CEO believes that the streaming service will ultimately do great in India. "As the content opportunity continues to scale and our ability to access the market and thrill those audiences continues to grow, we could do quite well in India," Sarandos says, adding that the company is still investing in it.
Learning from the success in India, Netflix reduced prices in an additional 116 countries in Q1 2023. While these represented less than 5% of its FY22 revenue, the company believes that increasing adoption in these markets will help to maximise its revenue longer term.
"We are not saying every market is going to play out like that, but that's what it would look like a success," says Netflix chief financial officer Spence Neumann.
Netflix added 1.75 million paid members in the first quarter of 2023.
The streaming company launched paid sharing in four countries — Canada, New Zealand, Spain and Portugal — during the first quarter. It, however, delayed a broad rollout of its paid password-sharing option to the second quarter.
"We found opportunities to improve the experience for members. We learn more with each rollout and we’ve incorporated the latest learnings, which we think will lead to even better results. To implement these changes, we shifted out the timing of the broad launch from late Q1 to Q2. While this means that some of the expected membership growth and revenue benefit will fall in Q3 rather than Q2, we believe this will result in a better outcome for both our members and our business," the company says.
