NEW DELHI: Content streaming giant Netflix has reported slow growth in its third quarter (July-September period) despite the social distancing times, admitting that it has much work to do in countries like India which are lagging behind in terms of growth for the company.
Netflix said that growth has slowed with 2.2 million paid subscribers in Q3 while the company added 6.8 million paid net adds in the same quarter last year.
While the APAC region was the largest contributor to its paid membership growth (accounting for 46 per cent of all global paid net adds) as APAC revenue rose 66 per cent (year over year) especially in South Korea and Japan, Netflix has a lot of ground to cover in India.
"We're working with local partners like Reliance Jio, India's largest mobile operator, where in Q3 we launched a bundle with their mobile and fiber broadband plans.
As part of this broad partnership, we'll integrate Netflix with two of Jio's set top boxes," the company said in a letter to its shareholders on Tuesday. "We've also partnered with financial institutions in India to make payment processing easier and more seamless for our members, which we expect will have retention benefits," it added.
Netflix said that its non-fiction series 'Indian Matchmaking' was watched by a quarter of its members in India and millions of members outside of India in its first four weeks. "We invest heavily into improving our product, partnerships and overall consumer experience. For example, in India in Q3, we localized our service to support Hindi in our user interface," the streaming platform said.
"We strive to be a global entertainment service that can satisfy the needs of members all over the world. Commissioning and producing local language content is an important part of that". The company generated over 1.3 billion in net cash in Q3 2020. Free cash flow was positive for a third consecutive quarter at USD 1.1 billion.
Admitting that the state of the pandemic and its impact continues to make projections very uncertain, Netflix said it expects growth to revert back to levels similar to pre-COVID in 2021. "With USD 8.4 billion in cash on our balance sheet at the end of the quarter plus our USD 750 million credit facility (which is undrawn), our need for external financing is diminishing. As indicated last quarter, we don't have plans to access the capital markets this year," Netflix told shareholders.