Convergence Plus
Monday, July 6, 2020
Netflix Revenue Soars on Local Content, Marketing

Reports a net profit of ₹5.1 crore in FY19 as co adds subscribers. The Indian unit of Netflix Inc, the world’s largest online video streaming company, grew more than 700% during 2018-19, helped by expanding local content and marketing blitzkrieg that helped bring subscribers.

Netflix India reported revenues of ₹466.7 crore for FY19 with a net profit of ₹5.1 crore, according to its filing with the registrar of companies sourced from Veratech Intelligence.

In FY18, Netflix India had a turnover of ₹58 crore with ₹20 lakh net profit, which reflected financials for seven months starting September last year after the actual transfer to local distribution entity from Singapore.

“A combination of factors including original content for India, partnership with Airtel for better access to market and fixing payment issues helped Netflix,” said Mohit Yadav, founder of Veratech. “All this combined with new low cost-based variants for a price-sensitive Indian market is the reason behind Netflix's phenomenal growth.”

While the California-based company entered India in January 2016 as part of its global rollout, Netflix was registered as a limited liability partnership (LLP) in the country in April 2017 when it started commissioning content.

Since the company doesn’t share region wise content cost or amortisation ratio, it is difficult to ascertain operating profitability in the market.

Netflix India did not respond to an ET query as of press time Sunday.

The number of digital video viewers in India continues to grow as cheap data plans flood a country of 1.3 billion people, say experts. The country currently has more than 300 million online video viewers, and it’s expected to reach 550 million by FY23. There are 39 companies offering video streaming services, up from nine in 2012. Netflix has low digital video viewers in the country compared to rivals due to its relatively high prices and low amount of local-language content. Its monthly subscriptions start at ₹500, which doesn’t allow simultaneous viewing. Higher plans (₹650 and ₹800) allow for multiple users and simultaneous viewing.

Star India’s streaming platform Hotstar, which controls nearly three fourth of the market, offers a VIP plan for ₹365 a year and premium plan at ₹999 per year, while Amazon Prime Video has a monthly plan of ₹129 and annual of ₹999. The entry of Apple TV+ at ₹99 per month and launch of Disney+ next week are expected to make India a hotbed for content war.

While Netflix doesn’t share subscriber numbers of individual markets, industry estimates put the video streaming service’s Indian subscriber base at 1-1.2 million as of March 2019. The number has increased post July this year when the company launched a mobile only plan at ₹199 per month. (Source: Economic Times)

Infy-Bansal Row Closure Good for Co

Many experts feel the lingering issue is a distraction for the management of company. Infosys’ move to settle alleged offences relating to the severance pay to former chief financial officer Rajiv Bansal will allow the company to remove a distraction and focus more on business, said analysts tracking the company.

On Friday, Infosys said the company and some of its current and past executives had applied to the Registrar of Companies (RoC), seeking to settle the charges through compounding — a provision under the Companies Act that allows businesses to quickly close certain cases by paying a fine.

“It is good to close the matter. Otherwise, this is a distraction for the management,” said Siddharth Pai, who was involved in more than $20 billion of outsourcing contracts as part of an advisory firm.

The charges it wants to settle include the failure to seek prior and separate approvals from the nomination and remuneration committee, audit committee and the board of the company for the severance package, and also not making the requisite disclosures, the filing said. Infosys founder NR Narayana Murthy had raised a red flag in February 2017 over the company’s alleged failure to meet disclosure guidelines. He said the details of the severance package to Bansal had also not immediately been placed before the board.

This and issues concerning the acquisition of Israeli firm Panaya led to a public spat, forcing the then chairman R Seshasayee, chief executive Vishal Sikka and two board members to quit. In February, Infosys paid ₹34 lakh to Sebi to settle the market regulator’s charge that the company had not received approval from its board committees before committing to pay the former executive. Infosys said on Friday it applied for compounding “to put this legacy matter to rest”. (Source: Economic Times)

Govt to vet responses by Amazon, Flipkart on their India operations

Govt to vet responses by Amazon, Flipkart on their India operations. Decision on future action will be taken depending on whether the responses indicate violation of rules, say officials

E-commerce companies including Amazon and Flipkart have submitted their responses to the queries sent to them by the Department for Promotion of Industry and Internal Trade (DPIIT) on their operations in India, which are now being vetted by the government to see if existing rules might have been flouted, an official has said.

Queries on business details such as top sellers, pricing of goods by vendors, capital structure and inventory management system were posed to the e-commerce companies following complaints by brick-and-mortar retailers as well as online vendors alleging that these companies may be violating FDI rules.

“The DPIIT is in the process of going through the responses given by the companies to the queries. Future action will depend on the information received,” the official said.

The Confederation of Indian Traders (CAIT) has complained to the Centre about alleged violation of FDI rules by e-commerce majors and accused them of predatory pricing, deep discounting, controlling inventory and influencing prices. The DPIIT then sent questionnaires to the e-commerce companies asking them to disclose information such as the names of top five sellers on their platform and the price of goods sold by preferred vendors and support to sellers to examine if they had a connection with sellers which could lead to the companies influencing prices of the items sold on their platform. “It is too early for the DPIIT to comment on the information received as it is still being examined. If everything is in order we will let the matter be. If not, then it can be taken up with the appropriate authorities,” the official said. The CAIT, in a press statement on Friday, said that it had convened a meeting of its National Governing Council on November 10 to take stock of the current situation and finalise the strategy for a movement to be launched from November 13. (Source: The Hindu Businessline)

Department of Telecom directs circle heads to treat Airtel, Tata Teleservices as separate companies

Asks them to audit customer acquisition form of both companies separately. The telecom department has directed all circle heads to treat Bharti Airtel and Tata Teleservices as separate entities, as it is in process to challenge their merger in the Supreme Court, according to an official source.

The Department of Telecom (DoT) has also asked all its entities to deal customer acquisition process and all compliance related issues of both the companies as separate companies.

“The department has written to all telecom circles heads on November 6 that it has not yet taken on record the transfer or merger of the demerged undertakings of TTSL to Bharti Airtel and Bharti Hexacom and transfer or merger of the demerged undertakings of TTML to Bharti Airtel,” an official source said.

Bharti Airtel on July 1 announced that the consumer mobile business of Tata Teleservices Ltd (TTSL) has now become its part. “The DoT has written that it is in process of two separate special leave petitions before the Supreme Court,” the source said.

The department, in the communication to the circle heads, asked them to audit customer acquisition form of both companies separately and even the compliance related to subscriber base should be handled separately.

“DoT has directed circle heads that there should be segregation of CAF audit process of Airtel and Tata Teleservices such as submission of separate subscriber database, submission of separate sampled CAF’s, calculation of separate compliance percentage and issuance of separate demand notice for imposition of penalty of Airtel and Tata Teleservices,” the source said.

Bharti Airtel has been submitting Tata Teleservices subscriber base as part of its overall customer base July onwards. When contacted, Bharti Airtel spokesperson said both the parties have operationalised the merger following the telecom tribunal TDSAT’s (Telecom Disputes Settlement and Appellate Tribunal) order directing the DoT to take the merger on record and approval of the schemes of arrangement by the NCLT, Delhi and NCLT, Mumbai.

“The DoT was duly notified of the same. The Registrar of Companies has also taken the merger on record. Needless to say, Bharti Airtel adheres to the highest standards of corporate governance and compliance,” the Airtel spokesperson said. In June, Airtel recorded mobile subscriber base of 320 million and Tata Teleservices 10.7 million. In July, Airtel reported mobile subscriber base of 328.5 million which includes customer base of Tata Teleservices as well. (Source: The Hindu Businessline)

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