Netflix India posts net profit in first year of producing local content

Netflix India posts net profit in first year of producing local content
Photo Credit: Photo Credit: Reuters
30 Oct, 2018

The Indian unit of Netflix, the world’s largest online video streaming company, has turned in a net profit in the first full year since it began commissioning content in the country.

Netflix India has reported a net profit of Rs 20.22 lakh for the financial year 2017-18 on revenues of Rs 58 crore, according to filings with the Registrar of Companies.

The unit's total expenditure stood at Rs 57 crore for 2017-18.

US-headquartered Netflix Inc had made its India debut in January 2016, but registered as a limited liability partnership (LLP) only in April last year.

The above-mentioned financials reflect the company’s performance for seven months starting September 2017, which is when the actual transfer to a local distribution entity from Singapore took place.

Email queries sent to Netflix seeking further details did not elicit a response till the time of publishing this report.

Netflix primarily earns from subscriptions. It has been spending billions on original content in markets including India as it seeks to cement its position at the top of the streaming industry globally. The company’s international streaming revenue grew over 58% last year, according to its latest filings.

Analysts had pointed to "solid trends" in India after Netflix Inc released its quarterly earnings recently, with the success of homegrown shows like Sacred Games and Ghoul helping raise its profile and hopes for future growth.

India’s video streaming market has been getting increasingly crowded of late.

Prominent players include 21st Century Fox-backed Hotstar; Voot, a joint venture between Network18 Media & Investments Ltd and US peer Viacom Inc; SonyLIV from Japan’s Sony Corp; Zee Entertainment’s ZEE5 and production house Balaji’s ALTBalaji.

In addition, Amazon launched its Prime Video service in India last year.

In June, Times Internet Ltd (TIL), the digital business arm of media conglomerate Times Group, announced its foray into video streaming with the acquisition of South Korea-based video platform MX Player for Rs 1,000 crore (around $147 million).

Netflix admitted a few months ago that it was far behind video-sharing site YouTube and Hotstar, but was Indianising itself with more original local content to equal rivals.

While traditional players in the country had been following a 'free-mium model', which essentially means most of the content is free and they charge only for some premium content, Netflix introduced a subscription-only model. Other players are gradually moving to a subscription model as well.