New Delhi: 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 per cent year-on-year increase in subscriber additions and 24 per cent growth in revenue in India after launching a low-cost subscription plan in the country in 2021.
For the first time, the company had reduced subscription prices by 20-60 per cent to suit the Indian market and deepen its penetration.
“These cuts – combined with an improved slate – helped India grow by nearly 30 percent year-on-year, while F/X (foreign exchange) neutral revenue growth in 2022 up to 24 percent (vs. 19 percent) 2021). Learning from this success, we reduced prices in an additional 116 countries in Q1,” Netflix said in its earnings report for the March 2023 quarter.
Countries where over-the-top (OTT) players have slashed prices account for less than 5 per cent of total revenue during FY22.
“We believe that increasing adoption in these markets will help us maximize our revenue over the long term,” the company said.
Netflix’s global net income for the quarter ending March 2023 is expected to drop by nearly 18 per cent to USD 1,305 million, from USD 1,597 million in the same period a year ago.
However, Netflix’s revenue grew by 3.7 percent to USD 8,162 million in the March 2022 quarter from USD 7,868 million in the March 2022 quarter.
Globally, the company’s paid membership grew 4.9 per cent year-on-year to 232.5 million.
Netflix expects its net income to decline by about 1.6 per cent to US$1,283 million in the April-June 2023 quarter, while revenue will rise by 3.4 per cent to US$8,242 million.
The company, which earlier resisted ads on its platform, has now launched ad-based plans with lower subscription price points than its initial plans.
“The level of engagement with our ads has exceeded our initial expectations and, as expected, we have seen very little switching from our standard and premium plans,” Netflix said.