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Netflix India grows FY19 revenues four-fold; expenses shoot up 700%

Netflix India grows FY19 revenues four-fold; expenses shoot up 700%
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An aggressive focus on original and localised content seems to have caused a huge jump in expenses at Netflix India, the domestic arm of the US-headquartered video streaming major. In the financial year ended March 31, 2019, the India-based entity reported an over 700% increase in expenses at Rs 461 crore. 

While the company also reported an eight-fold growth in its FY19 topline at Rs 467 crore, likely led by higher subscriptions on account of its localisation strategy, profitability fell to 1.42% from 1.81% in the previous year on account of the increase in expenses. Net profits for the year stood at Rs 5.1 crore, which will be transferred to reserves, according to the company’s latest regulatory filings show.

The Indian operations are run through Netflix Entertainment Services India, which is a limited liability partnership. 

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Through FY19, Netflix launched original localised series such as Lust Stories, Sacred Games, Ghoul and also acquired streaming rights for Dice Media-owned webseries Little Things, aiming to replicate its success in the US with originals such as House of Cards, Orange, Stranger Things.

Netflix had adopted the localisation strategy after acknowledging that it was far behind in subscriptions in India in comparison to competitors. 

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In India, Netflix competes chiefly with Disney-owned Hotstar, Amazon Prime and Times Internet-owned MX Player.  

Among OTT (over-the-top) digital video platforms in India, Netflix falls in the premium category, with monthly subscription costing Rs 500. Hotstar and Prime charge Rs 199 and Rs 129 a month respectively.

Last week, Hotstar holding company Novi Digital, posted a four-fold increase in revenues to Rs 1,112 crore, but saw widening of losses to Rs 554 crore. In October, MX Player raised $110 million in a growth round from Chinese technology conglomerate Tencent Holdings.

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India’s OTT market is projected to grow 10 times to $5 billion by 2023.  


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