Netflix's India arm, Netflix Entertainment Services India LLP, received a 24 per cent year-on-year growth in its FY23 revenue, reaching Rs 2,214 crore, as per regulatory filings with the Registrar of Companies (RoC). The net profit also witnessed a substantial increase, growing by 75 per cent compared to the previous year to Rs 35 crore.
The growth in both revenue and net profit is attributed to Netflix's decision to reduce the price of its subscription plans in December 2021, leading to enhanced customer engagement and increased subscriber numbers in the calendar year 2022. In 2023, Netflix globally, including in India, implemented measures to crack down on password sharing. The company also aggressively promoted its mobile-only plan priced at Rs 149 in India to drive up subscriber numbers, according to sector experts.
Netflix operates through two entities in India, Netflix Entertainment Services India LLP and Los Gatos Production Services India LLP. Los Gatos is responsible for Netflix’s content investments in India, and the firm's inventories, including licenced content and titles under development, grew by 25 per cent year-on-year in FY23, reaching a value of Rs 2,269 crore.
In November 2023, Los Gatos received a capital contribution of Rs 1,300 crore from the parent entity in the US, bringing the total investment in the firm to Rs 5,700 crore since its inception in 2019.
During FY23, Netflix Entertainment Services spent Rs 125 crore on personnel services, marking a 30 per cent increase from the previous year. Meanwhile, its other expenses, comprising marketing and distribution costs, increased 24 per cent year-on-year to Rs 2,062 crore.
While the revenue growth in FY23 surpassed the 16 per cent seen in FY22, it fell short of the remarkable 66 per cent growth observed in FY21, during the peak of the pandemic-driven digital services consumption boom.
In many global markets, Netflix has introduced an ad-supported subscription plan that has contributed significantly to its growth. In the September 2023 quarter, the company globally experienced a 70 per cent surge in subscriptions for its ad-supported plans. However, this model has not been introduced in India yet.
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