We want to be in business in a way where we declare profits of $5bn-$6bn: Netflix India’s Monika Shergill

Netflix India’s Vice President of Content Monika Shergill says the global streaming giant is focussed on high user engagement, revenue and profits, and not racing to the bottom even as Reliance Industries-backed JioCinema’s free streaming of IPL has intensified the already hotly contested 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 and most of the competitors world over are actually losing $10-11 billion collectively and that is not the way to run a good streaming business,” she said at the FICCI Frames event in Mumbai on Wednesday. 

Netflix posted $1.31 billion in profit and added 1.75 million subscribers in the just concluded March quarter. 

She pointed out that streaming platforms are quick to declare success with most-watched lists, but there is no common methodology. And neither is it just the highest subscriber count. Instead, but a combination of high engagement as well as growths in revenue and profit.   

“It is important to look at all these three fundamentals if you are running a healthy business model for success and not just a race to the bottom. That race to the bottom can only be sustained if your core business is not entertainment and it’s a side business or it’s a value-add for you. But if you want to be a content and entertainment company, you have to start thinking of sustainability.” 

Netflix’s co-CEO Ted Sarandos has called India a big prize where it is important for the global streaming giant to get pricing and payments methods right, noting that a price reduction in December 2021 increased user engagement by 30 per cent and revenue growth of 24 per cent in 2022 compared to the year prior. 

Unlike box office collection for movies and TRP ratings for television shows, there isn’t a unified success metric across the 40-plus streaming platforms relaying content in the country. Platforms are splurging on content to amass subscribers – a metric which most platforms do not disclose publicly, at least not at the country-level. Besides, the focus is on internal metrics such as monthly active users, daily active users, number of hours, minutes and seconds a piece of content is watched.   

Netflix has an estimated 6 million subscribers in India. Amazon Prime Video has approximately 20 million, but it is bundled with e-commerce and other services. Disney+ Hotstar has a whopping 57.5 million subscribers in Asia – a large majority of it comes from India, making it the largest streamer by user base in the country. But it has been losing subscribers because of the IPL void. 

Besides, OTT platforms do not get a large chunk of their subscribers organically but through bundled telecom packages which offer multiple OTT subscriptions at a discounted price.