Netflix India's net profit jumps 75% in FY23; revenue up 24% on subscriber growth

India has emerged as one of the fastest growing markets for the video streaming service Netflix in the past couple of years

Video streaming platform Netflix's India arm has posted a net turnover of Rs 2,214 crore for the financial year 2022-2023 (FY23), registering a 24.1 percent year-on-year (YoY) growth, as per the company's latest filing with the Registrar of Companies sourced from PrivateCircle Research.

The growth was likely led by an increased subscriber base in the country, due to an expanded content slate. Moreover, price reductions also helped the company boost engagement among users in India, thus supporting subscriber growth.

The company's total income grew by 24.4 percent to Rs 2,286.3 crore in FY23 from Rs 1,837 crore in FY22. Net profit jumped by 75 percent YoY to Rs 35.3 crore in FY23 from Rs 20.1 crore in FY22.

During the financial year, Netflix's personnel expenses rose 29.2 percent to Rs 124.6 crore in FY23 from Rs 96.4 crore in FY22. Other expenses, which include marketing costs, increased by 24 percent to Rs 2,062 crore in FY23 from Rs 1,667 crore in FY22. The company's total expenses saw a 23.9 percent increase to Rs 2,232.5 crore in FY23 from Rs 1,802 crore in FY22.

Apart from being a key content hub, India has emerged as one of the fastest-growing markets for the video streaming service in the past couple of years. In April 2023, Netflix co-CEO Ted Sarandos said that India is a "big prize" because it has an enormous population of entertainment-loving people and the appetite for digital content is rising in the country.

While Netflix remains among the costliest video streaming services in India, the service has taken several steps to attract customers in India. This includes introducing a mobile-only plan and piloting various pricing experiments in the country.

Netflix also reduced its service prices in India by 20-60 percent in December 2021, even as it hiked prices in other markets such as the United States and the United Kingdom. The price reductions, along with an improved content slate, have helped boost engagement in India by nearly 30 percent YoY, Sarandos said in April 2023.

That said, the streaming service has also cracked down on account sharing in India, as part of a broader global effort to boost its revenue growth. Netflix is however not offering the 'extra member' option in India and certain other markets, unlike many other mature markets, citing recent price cuts and relatively low penetration.

Netflix competes in India with a slew of domestic and international rivals, including Disney+ Hotstar, Amazon Prime Video, Zee5, Sony LIV, and JioCinema. The service had around 6.5 million subscribers in India, as per a report by analysts at AllianceBernstein in October 2023.