Netflix scores with StreamFest in India as global subscriber base crosses 200 million

Bengaluru: Netflix Inc.’s StreamFest initiative in India, which gave free weekend access to non-subscribers in December, brought in “millions of users” to the streaming platform, in the face of increasing competition from local rivals.

That pushed Netflix’s global subscriber base to more than 200 million, as 8.5 million users joined the platform during the October-December quarter, the company’s quarterly results declared Wednesday showed. For the full year, Netflix added a record 37 million paying subscribers as content consumption surged due to coronavirus lockdowns.

The company’s operating profit grew 76% over the year ago to $4.6 billion in 2020 on the back of $25 billion in annual revenue, regulatory filings showed.

StreamFest was one of Netflix’s attempts at ramping up its user base in India, a market it sees as crucial for future growth. While the company doesn’t provide a country-wise breakup, the Asia-Pacific region was the second largest contributor to subscriber growth in the quarter ended December—accounting for 23.5% of the global paid additions during the quarter. Netflix has 25.5 million paying subscribers in the region, which translated to a revenue of $685 million—a 64% growth over the previous year.

“The primary learning is, there is a lot of interest amongst consumers in India to try Netflix,” Greg Peters, the company’s chief operating officer and chief product officer, said of StreamFest during a post-earnings conference call on Wednesday. “Now we go through the more difficult part of actually analysing how that interest through this specific tactic translates into sustained incremental growth.”

“Based on what we see there, we’ll inform how we think about how we leverage that tactic again or how we improve on it,” he said.

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No More Debt Financing

Netflix said it is very close to being free cash flow positive and that no longer needs to raise external financing for its day-to-day operations.

In the letter to shareholders, Netflix said it anticipates free cash flow at break-even levels for 2021, while noting that it has a cash balance of $8.2 billion and an undrawn credit facility of $750 million. “As we generate excess cash, we intend to maintain $10-15 billion in gross debt and will explore returning cash to shareholders through ongoing stock buybacks, as we did in the past (2007-2011),” the company said.

This is a key milestone for the streaming major as it has borrowed $15-16 billion over the past several years to build its content library and fend off growing competition.

“Our strategy is simple: if we can continue to improve Netflix every day to better delight our members, we can be their first choice for streaming entertainment. This past year is a testament to this approach,” the company said.

Disclaimer: Times Internet’s MX Player competes with Netflix in India’s online streaming space.


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