We are still figuring things out in India: Netflix Co-CEO Reed Hastings
Netflix Chief Operating Officer and Chief Product Officer Greg Peters spoke about the partnership with Jio and how it has helped Netflix to reach a new set of users
Netflix Co-CEO Reed Hastings has said that the entertainment streaming giant is still figuring out things in the Indian market. He also said that investments in the Indian market take "some guts and belief forward-looking".
"We have had enough success in Japan and South Korea for you guys to think about it like Germany or France like it’s a big developed rich market. We have got that wired. India, we are still figuring things out. And so that investment takes some guts and belief forward-looking. But the other investments you should think of, just like rich European countries content exports really well and we are just getting a little better every month on it," Hastings said in the Q1 earnings conference call.
Hastings noted that Netflix is still mostly focused on getting content fit and broader content. "So that’s why I would say that one is a more speculative investment than, say, Korea or Japan, which again, 5 years ago was very speculative when we did those, okay. But we have got – we are over the hump on that. We have got a great match. And we are still working on India, and we’re super exciting. And again, right now, this month, things are terrible in the COVID spike. But outside of that, we’ve been really producing a lot of great new content that’s currently shut down."
Netflix Co-Chief Executive Officer and Chief Content Officer Ted Sarandos added that the platform is always looking for a product market fit. He also noted that the platform launched in international territories without any local original content and today it is one of the leading content producers in some of these markets. Recently, Netflix had announced its biggest ever slate for India. As part of its 2021 content slate, the platform has lined up 41 titles across films, series, comedy, documentary, and reality genres.
"And I do think our confidence in investment in Korea and India and Japan has been the success of the investments to date and that it gets us closer and closer to that product market fit than we have in our more mature markets. So, I do think like – and what we have seen in our Korean originals and our Japanese anime is that they play really well around the region as well as in country. And occasionally, they could be very, very global in their interest and desire. And the fact that we can bring a global audience to those creators in each of the territories has been really attractive," Sarandos said.
Noting that India is a tremendous opportunity, Sarandos said that Netflix offers a tremendous opportunity for the creative community to connect with enormous audiences. "And it’s just like all great opportunities. It’s a long journey, and it’s a challenge. And we think it’s worth it. And that’s why we’re investing early and trying to stay ahead of it. And I think we will be able to see those kinds of results that we’ve seen in other places in the world as we continue to learn more and more and more."
Netflix Chief Operating Officer and Chief Product Officer Greg Peters spoke about the partnership with Jio and how it has helped Netflix to reach a new set of users. "Jio is a great example of a partner we’ve been working with there to really bring the service to a new demographic at a very, very low price associated with low-cost mobile plans that they are offering as well as home-based IPTV plans. And those have been successful for us as well. So it’s constantly just trying to push on all those different engines and really figure out. What is that right price point, the right offering in the right way that works for the local members and consumers."
Peters also said that a key focus area for Netflix is to continually look at broadening accessibility. "So, how do we bring in price points that are low enough for more and more of the world’s population to be able to access the service to enjoy the kind of amazing stories that we are creating. You have seen us do that with rolling out the mobile plan, for example, in several countries in Asia. That sort of we find a good balance of features and price points. We are going to just do more and more of that. But I think the broad trajectory is the one that you have seen, which is a widening of the breadth of our offerings and price points associated with them."
Meanwhile, Netflix's revenue in Q1 2021 grew 24% year over year to $7.16 billion while operating profit and margin reached all-time highs. The company finished Q1’21 with 208 million paid memberships, up 14% year over year, but below the guidance forecast of 210 million paid memberships. The company attributed the slowdown in paid membership growth due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays.
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