Entertainment OTT player Netflix has slashed subscription rates in 116 countries following the success of its business model in India, the company said on Wednesday.
Netflix has seen a 30 percent growth in customer engagement and 24 percent revenue growth year-on-year in India after it launched a low-priced subscription plan in the country in 2021.
The company had for the first time reduced subscription prices in the range of 20-60 percent to suit the Indian market and deepen its penetration.
“These reductions — combined with an improved slate — helped grow engagement in India by nearly 30 percent year-on-year while F/X (forex) neutral revenue growth in 2022 accelerated to 24 percent (versus 19 percent in 2021). Learning from this success, we reduced prices in an additional 116 countries in Q1,” Netflix said in its earnings report for March 2023 quarter.
The countries where the over-the-top (OTT) player has slashed the price contributed less than 5 percent to its total revenue during the financial year 2022.
“We believe that increased adoption in these markets will help to maximize our revenue in the longer term,” the company said.
Netflix’s global net income declined by about 18 percent to $1,305 million (roughly Rs. 107 crore) in the quarter that ended March 2023 from $1,597 million (roughly Rs. 131 crore) in the same period a year ago.
The revenue of Netflix, however, grew 3.7 percent to $8,162 million (roughly Rs. 671 crore) during the reported quarter from $7,868 million (roughly Rs. 647 crore) in the March 2022 quarter.
The company’s paid membership globally grew 4.9 percent on YoY basis to 232.5 million.
Netflix expects its net income to decline by about 1.6 percent to $1,283 million (roughly Rs. 101 crore) in the April-June 2023 quarter while revenue to increase by 3.4 percent to $8,242 million (roughly Rs. 677 crore).
The company, which has earlier averse to advertisements on its platform, has now started advertisement-based plans with lower subscription price points compared to its initial plans.
“Engagement on our ads tier is above our initial expectations and, as expected, we’ve seen very little switching from our standard and premium plans,” Netflix said.