Netflix's viewing engagement in India grew by 30%, and revenue grew by 25% last year, said Ted Sarandos, Co-CEO, Netflix. In a conversation with Anupama Chopra, Founder & Editor, Film Companion, Sarandos spoke about growth in India, the focus on more local content and taking Indian cinema global. Edited excerpts:

Four years ago, Reed spoke at this conference, and post-transition, this is also my first international visit to this conference. It's so good to be here today. The first half of last year was pretty rough, as we got off to a slow start recovering from Covid-19, and we had to navigate a whole lot of uncertainties, including shutting down our operation in Russia, where we had a million subscribers. But in the second half of the year, we really kept moving. I think it speaks to the company we've built, filled with incredibly smart and resilient people. We got singularly focused on reigniting growth and started to focus on content and programming around the world. We even built an ad product from scratch in six months that worked worldwide. We started with hits like Stranger Things Season 4 and rolled into big global phenomena like Wednesday, with back-to-back hits from all of our content around the world.

I believe that our original projects are improving every day, and I think it's hit or miss when entering a new market. In my experience, what works in one country may not work in another, and it's essential to be on the ground to understand consumer tastes, culture, industry, and the challenges faced by creators in that country. In India, for example, we noticed a rich cinema culture and a lack of focus on television, which led us to create Sacred Games, our first attempt at combining cinema principles with television. Now, we've produced 100 original projects in India, with 28 of them released just last year, and our upcoming slate of films and series for the next year looks stronger than ever. We've invested heavily in India, not only in production but also in having a local team that understands the local culture, storytellers, and audience. Our team running India is based in India, which gives us a big advantage over companies that try to run India from California and get frustrated early on. Our office in Mumbai has 250 people, and we also have an office in Delhi. All of this allows us to create great content in India.

For me, as Netflix, an absolute measure of success starts with engagement. We ask ourselves, “Do people care enough to spend their viewing time with us?” Do they choose to spend their screen time with us instead of the other options out there? That's why I believe the engagement metric is so important. In India, I've had the best year of our existence. I’m proud to say that the viewing engagement in India grew by 30%, and our revenue grew by 25% last year. This wouldn't have happened if it wasn't tied to that engagement metric. I understand that a lot of measurement around subscriber numbers makes for nice headlines, but they're not a real business metric for us. We need to see what's behind that subscriber number. Is there engagement, is there revenue, and is there profit? For Netflix, the answer is yes!

In my opinion, what's truly remarkable about RRR and Gangubai Kathiawadi this year is that they represent an inflection point, a change in distribution or storytelling, or an alteration in audience appetite. Having been in Los Angeles during award season, I can say that RRR and Gangubai were the talk of the town. Everyone was discussing them, and there were 180 movies to watch on the voting site, yet these two were among the most watched, with many viewers discovering them on Netflix. That's the power of Netflix, pushing these movies into the cultural conversation and generating buzz. For many people I know, RRR may have been their first Indian movie, and it took them on a wild journey that left them wanting more. Squid Games did that for Korean content around the world, and again, it was all thanks to Netflix. It's not impossible to have a global hit, but it's very rare, and you need a distribution platform like Netflix and a system of curation that can surface things you may not know you're going to like. That's what we do at Netflix, and it's why RRR has been such an enormous success. The director himself acknowledged as much at the Golden Globes, noting that most people in the world found it on Netflix.

Another film that's worth mentioning is The Elephant Whisperers, which is nominated for Best Short Documentary at the Academy Awards this year. It's our second nomination in the short documentary category, with the first being Period, End of Sentence, which won the Oscar a few years ago. Both films are from India, and I'm proud to see them receiving recognition at such a prestigious event.

Reigniting the growth of our company, we have gotten to think about how there has been a lot of recent discussion about the streaming business. People are openly questioning whether or not this is a good business. Of course, it's a great business because this is what consumers want. The world is moving toward streaming and on-demand, away from linear television, away from pay television, and away from traditional movies.

Let's look at what success means in streaming. I really think there are only three business metrics. Number one is engagement. We clearly lead the way in this area around the world. The second one is revenue, do people pay? And then, because that can be reinvested in more content and more programming, it creates consumer joy. And then the third is profit—is it profitable? And among all of our peers, we are profitable. Our major competitors are not.

The key is that whenever we launched anywhere in the world, the first people who signed up for Netflix were probably western centric in their days, early adopters of technology, had wired broadband at home and a big screen TV and as you get more massy, you need to have more price points. So over the years, we've added multiple price points, we're rolling out an ad tier around the world. And then programming too, becomes a little more than the mainstream, you don't abandon the other program you have, you just add more.