Netflix cuts subscription rates in 116 countries after success in India

Video-streaming platform Netflix has slashed its subscription rates in 116 other countries following the success of its business model in India.

The streaming giant has seen a 30 per cent growth in customer engagement after it reduced the prices of its services in India by 20 to 60 per cent in December 2021 amid a rising appetite for digital content in the country.

"The cap in price combined with an improved slate helped grow engagement in India by nearly 30 per cent year-on-year," Netflix said in its earnings report for March 2023 quarter. "F/X (forex) neutral revenue growth in 2022 accelerated to 24 per cent (versus 19 per cent in 2021). Learning from this success, we reduced prices in an additional 116 countries in Q1," it added.

According to the entertainment over-the-top (OTT) player, the countries, where it has slashed the price, contributed less than 5 per cent to its total revenue during financial year 2022. "We believe that increasing adoption in these markets will help to maximize our revenue in longer term," the company said.

Netflix's global net income declined by about 18 per cent to USD 1,305 million in the quarter ended March 2023 from USD 1,597 million in the same period a year ago. Its revenue grew 3.7 per cent to USD 8,162 million during the reported quarter from USD 7,868 million in the March 2022 quarter.

Netflix's paid membership globally increased 4.9 per cent on YoY basis to 232.5 million. The company now expects its net income to decline by about 1.6 per cent to USD 1,283 million in the April-June 2023 quarter while revenue to increase by 3.4 per cent to USD 8,242 million.

Netflix, which was earlier averse to advertisements on its platform, has now started advertisement-based plans with lower subscription price points compared to its initial plans. It estimates that over 100 million people use an account that they don't pay for, which comes as a hurdle to its ability to invest in and improve the service for its paying members.

with PTI inputs