Netflix India’s VP of Content Monika Shergill said the company wants to run a profitable and sustainable business rather than a race to the bottom.
Monika Shergill, Vice President of Content at Netflix India, says the global streaming giant is focused on high user engagement, revenue, and profits rather than racing to the bottom, even as Reliance Industries-backed JioCinema’s free IPL streaming has heightened competition in the already crowded video OTT streaming space in India.
“As metrics, we are very clear that we want to run a sustainable streaming model and we want to be in business in a way where we declare profits of $5 billion- $6 billion while most of our competitors globally are collectively losing $10-11 billion, and that is not the way to run a good streaming business,” she said on Wednesday at the FICCI Frames event in Mumbai.
In the March quarter, Netflix made $1.31 billion in profit and added 1.75 million users.
She noted that while streaming providers are quick to proclaim achievement with most-watched lists, there is no standard process. It’s also not simply about having the most subscribers. Instead, a combination of strong engagement and revenue and profit growth.
“It is critical to consider all three fundamentals if you are running a healthy business model for success rather than a race to the bottom.” That race to the bottom can only be sustained if your primary business is not entertainment and it is a side hustle or a value-add for you. However, if you want to be a content and entertainment company, you must consider sustainability.”
Netflix co-CEO Ted Sarandos has dubbed India a “big prize” where the global streaming giant must get pricing and payment methods right, saying that a price cut in December 2021 improved user engagement by 30% and revenue growth by 24% in 2022 compared to the previous year.
Unlike box office receipts for films and TRP ratings for television series, there is no consistent success gauge across the country’s 40-plus streaming services delivering content. Platforms are spending money on content in order to gain subscribers, a statistic that most platforms do not publicly report, at least not at the country level. Furthermore, the emphasis is on internal metrics such as monthly active users, daily active users, and the number of hours, minutes, and seconds spent watching a piece of content.
In India, Netflix has an estimated 6 million customers. Amazon Prime Video has around 20 million subscribers, although it is combined with e-commerce and other services. Disney+ Hotstar has a huge 57.5 million users in Asia, the majority of which are from India, making it the country’s largest streamer by user base. However, it has been losing subscribers as a result of the IPL void.
Furthermore, OTT platforms obtain a large portion of their subscribers through bundled telecom packages that offer multiple OTT subscriptions at a discounted price.
