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Two retailers that have done well during pandemic lockdowns have been electronics and homewares companies Harvey Norman Holdings Limited (ASX:HVN) and JB Hi-Fi Limited (ASX:JBH). With more people spending time indoors sprucing up their home entertainment systems, electronics sales went through the roof last year. This shift in consumer trends translated into major profits for both companies.

JB Hi-Fi

The JB share price exploded over the last 12 months, almost doubling from a 52-week low price of just $28.90 to be now trading at $51.01 (still only just shy of the all-time high price of $55.25 it reached in January).

It’s easy to see what has driven the massive gains in its share price. In its most recent financial results – for the first-half FY21 – JB reported a 23.7% jump in sales versus first-half FY20 to a staggering $4.9 billion. But an even better sign for shareholders was that JB grew its bottom-line at a faster rate than top-line revenues, with net profit after tax (NPAT) surging 86.2% to $317.7 million.

While JB did not commit to an earnings outlook for the remainder of FY21, the company did report continued high sales growth in January across its key brands and geographies. Total sales growth in Australia for January was 17.3% (versus 6.5% for January 2020), while in New Zealand total sales grew by 21.7% (versus -1.6% in January 2020), and for the Good Guys whitegoods brand sales increased by 14.1% (versus 1.4% in January 2020).

Harvey Norman

Harvey Norman stocks a broader range of household products than JB, including bedding and furniture in addition to electronics. However, it still taps into the same shift in consumer trends that have benefited JB Hi-Fi. Its share price has also gone bananas over the last twelve months, surging just over 100% since this time last year – from a low of just $2.80 to its current price of $5.64.

The company also reported stellar results for the first half FY21. Total aggregated company sales revenues were $5.12 billion, an increase of 25.8% over first-half FY20. The company’s profit after tax also soared by 115.8% to $438.17 million. Harvey Norman also reported strong sales for the early stages of the second half FY21 as well, with aggregated sales revenue for the period from 1 January 2021 to 23 February 2021 up 21% versus the same period in the prior year.

Foolish Takeaway

Both of these companies have enjoyed an exceptional trading period throughout the pandemic. Both are expanding their margins and growing bottom-line profit at breakneck speed – particularly for two already established brands. And while it might be too early to tell just yet whether the lockdown sales tailwinds will continue to extend far into 2021 for either JB or Harvey Norman, results for the early stages of FY21 have been promising. 

More reading

• These are the 10 most shorted shares on the ASX
• Top brokers name 3 ASX shares to sell next week
• Why the JB Hi-Fi (ASX:JBH) share price surged 19% in March
• Afterpay (ASX:APT) also signs deal with JB Hi-Fi & The Good Guys
• Why AGL, Bubs, Harvey Norman, & Openpay are tumbling lower

Motley Fool contributor Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The DroneShield Ltd (ASX: DRO) share price is on investor radar today after announcing an order from a new customer. In early afternoon trade, the drone technology company’s shares are swapping hands for 16.5 cents, up 3.1%.

DroneShield specialises in drone security technology. The company designs and develops detection systems that use specialised technology to protect people, organisations and critical infrastructure.

Its multi-layered products are centred around detection and disruption from unmanned aerial systems (UAS).

New customer opportunity

DroneShield shares are reaching higher after the company delivered a positive update to the ASX.

According to its release, DroneShield advised that it has received an initial order from a high-profile law enforcement agency in the United States.

DroneShield noted that the purchase order includes a mobile system of two passive/non-emitting UAS detection sensors. The platform is designed to operate in a mobile theatre with a rapidly deployed system setup. This allows the user to quickly detect and track incoming UAS.

The company stated that the contract is not material in value, but expected to lead to follow up orders. In addition, it’s possible that other United States law enforcement agencies could place their own orders should this initial order become successful.

Total customer receipts for this contract is expected to be included in DroneShield’s quarterly 4C report for Q2 FY21.

DroneShield CEO Oleg Vornik welcomed the new deal, saying:

We are pleased to continue expanding the breadth of our US customer base, now reaching into law enforcement. It is a large and important market, and this initial deployment will serve as a reference case for expected follow-on sales.

DroneShield share price summary

Over the last 12 months, the DroneShield share price has jumped to more than 65%, but down 3% year-to-date. The company’s shares reached a 52-week high of 25 cents in September last year.

At the current share price, DroneShield presides a market capitalisation of around $64 million, with close to 390 million shares outstanding.

More reading

• Droneshield (ASX:DRO) share price moving on multiple product orders
• Here’s why the DroneShield (ASX:DRO) share price is flying 8%

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Creso Pharma Ltd (ASX: CPH) share price has come under pressure today despite the release of a positive announcement.

At the time of writing, the cannabis company’s shares are down 5% to 20 cents.

What did Creso Pharma announce?

This morning Creso Pharma announced an important appointment in the United States.

According to the release, the company has named leading cannabis executive John Griese as its Director of US Business Development.

Mr Griese has considerable experience in the cannabis sector through previous roles with Blooms Farms and most recently as the Chief Operating Officer of Supreme Cannabis Company.

With the latter, Mr Griese was directly responsible for product development, commercialisation initiatives, procurement, manufacturing operations, and supply chain management.

The new US Business Development Director has also previously worked for Creso Pharma as its Americas Chief Operating Officer.

Why is Creso Pharma making this appointment?

Creso Pharma made the appointment in response to the global trend towards cannabis legalisation, as well as recent legislation in New York State legalising recreational marijuana.

Mr Griese will focus on New York, Vermont, and other states to delineate a strategy for Creso Pharma to begin delivering products into the USA.

This is certainly a worthwhile endeavour. The release notes that New York State is expected to become one of the largest recreational markets in the US with an estimated market value of US$4.2 billion per annum.

The company notes that its ability to export cannabis products into the USA will remain subject to the federal legalisation of cannabis. However, having Mr Griese commence supply, sale, distribution and partnership agreements now, pending federal legalisation, provides the company with an opportunity to be a first mover in this large market. It also believes it will provide it with a significant competitive advantage over its peers.

Creso’s Non-Executive Chairman, Adam Blumenthal, commented: “We are very excited to welcome John back to Creso and Board and management are very confident that his new role will unlock a number of potential opportunities for the Company throughout the US.”

“The recent legislative push in New York State highlights the ongoing shift towards the federal legalisation of recreational cannabis and John’s appointment shows Creso Pharma’s commitment to establishing a strong foothold in-country to unlock value for our shareholders.”

“To already have boots on the ground in the US will provide the Company with a key advantage over our competition. John has established relationships in the US market through his roles in California and Toronto and we look forward to leveraging his network in the coming months.”

More reading

• Creso (ASX:CPH) share price edges higher on product launch
• Here’s why ASX cannabis shares are lighting up today
• How New Yorkers could send ASX cannabis shares higher
• Here’s why the Creso Pharma (ASX:CPH) share price is falling 7%
• Japan’s $103 million pot stock hypocrisy unmasked

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Rumble Resources Ltd (ASX: RTR) share price is surging today as the company starts drilling at its Earaheedy Zinc-Lead-Silver Project.

The Rumble Resources share price is up 28.5% at the time of writing, trading at $13.50 per share. 

Rumble Resources is a Perth-based mining company, focused on the acquisition, exploration and evaluation of base and precious metal projects. It’s currently exploring zinc, lead and silver deposits in Earaheedy, near Lake Carnegie in Western Australia.

Rumble Resources’ Earaheedy mine kicks off

Rumble Resources began reverse circulation (RC) drilling at its Earaheedy mine nearly one week ago today and its share price has been booming since. It’s targeting large tonnage, flat lying, near surface (open-pittable) sandstone-hosted zinc and lead deposits.

Shallow, open-pit mining generally produces the highest-grade results. Rumble Resources will know just how lucrative its current venture is in another two weeks’ time, when its current drilling program is scheduled for completion.

The drilling results will then be sent for assays (studies) and a more accurate lead, silver and zinc content of the mine will be known.

Rumble own 75% of the project area and 100% of the exploration licence. Initial exploration in Earaheedy has shown promising results over the mine’s two major prospects, called Chinook and Magazine.

Shallow drilling and high grade hopes

The Chinook exploration shows “significant” shallow zinc and lead deposits over 200 metres horizontal width and up to 12 metres vertical true thickness. Rumble says the prospect shows “a strong association” with higher-grade zinc and lead mineralisation.

Its results indicate a potential sandstone channel and facies zone, which is conducive to developing higher-grade zinc and lead minerals due to favorable porosity and litho-geochemical conditions. This is partly why speculative investors are already sending the Rumble Resources share price surging.

The company’s Magazine prospect is similar. Rumble says it has intercepted shallow flat lying higher-grade zinc and lead mineralisation in two holes, which highlights the potential for significant sandstone hosted channels and facies zones. 

Rumble’s exploration target is between 40 to 100 million tonnes at a grade ranging between 3.5% zinc and lead, to 4.5%. It’s operating at a shallow depth of 80 metres, and more than 40 kilometres of open prospective strike has been defined.

Rumble Resources share price snapshot

The Rumble Resources share price is one of today’s biggest movers and its also up 28% this week, 35% this month and 17% this calendar year. Its returned 114% this past year, up 64% against the basic materials sector.

More reading

• Why ASX lithium shares are shooting higher in April
• Bitcoin price mania spreads as Ether price hits record highs
• Skyfii (ASX:SKF) share price falls 7% after CrowdVision acquisition
• Why 88 Energy, Chorus, Incitec Pivot, & Santos shares are sinking
• The Raiz (ASX: RZI) share price is surging 9% higher today

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2021 has been a frustrating year for ASX lithium shares, Galaxy Resources Ltd (ASX: GXY), Pilbara Minerals Ltd (ASX: PLS) and Orocobre Limited (ASX: ORE) on the backdrop of an outstanding performance in late-2020. However, April has so far been a solid month for ASX lithium shares. Shares in ASX lithium are approximately 5% to 10% higher and within 20% of all-time highs. 

Why ASX lithium shares aren’t moving in 2021 

The Galaxy, Orocobre and Pilbara share price more than doubled between October 2020 and February 2021. This was driven by a broad range of factors. Furthermore, including a surging Tesla Inc (NASDAQ: TSLA) share price, Joe Biden’s stance on climate change, and higher lithium prices. 

However, the rapid appreciation of ASX lithium shares might have priced in current and near-term tailwinds. 

Broader weakness in lithium and renewable related sectors could also be a dragging factor. The Global X Lithium & Battery ETF (NYSEARCA: LIT) for example, fell more than 25% between 17 February and 25 March this year. This ETF invests in the full lithium cycle, from mining and refining through to battery production. The ETFs top three holdings include the world’s largest provider of lithium for electric vehicle batteries. Namely, Albemarle Corporation (NYSE: ALB), Chinese lithium giant Ganfeng, and multinational electronics company Samsung.

Lithium prices continue to grind higher 

Lithium prices have continued to push higher in March driven by an uplift in global demand. Fastmarkets provided the following commentary for recent lithium price movements:  

• Asian seaborne lithium prices were steady against a backdrop of tight availability and firm demand.  Meanwhile, Chinese suppliers have made aggressive offers for battery-grade lithium carbonate. 
• Spot trades in domestic Chinese market remained slow with consumers conducting “hand-to-mouth” purchases, but supply continued to be tight. 
• Europe, US battery-grade lithium spot prices continued to trend higher with deals reported at higher levels.

What’s next for ASX lithium shares? 

ASX lithium shares might continue to move sideways. However, the company’s are looking to ramp up production and push development projects forward to take advantage of higher prices. 

For Galaxy, this has involved ramping up production at its flagship Mt Cattlin mine. This was previously lowered to 60% of nameplate capacity. As well as advancing the development of its Sal de Vida lithium brine project. 

Pilbara follows a similar but more cautious approach where its half-year results commented that “any increase in production capacity will only occur once there is clear evidence of a sustained improvement in customer demand and pricing to support investment decisions and capital commitments”. Despite its more cautious tone, Pilbara did in fact make a significant $201 million investment to acquire neighbouring lithium miner, Altura Mining Ltd (ASX: AJM) late last year. 

 

More reading

• Brokers name 3 ASX shares to buy right now
• Why the Wesfarmers (ASX:WES) share price is up today
• Leading brokers name 3 ASX shares to sell today
• What’s happening with ASX lithium shares as battery-grade lithium prices push higher?
• ASX stock of the day: Pilbara Minerals (ASX:PLS) tops the ASX 200

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Bitcoin (CRYPTO: BTC) price is up 2% in the past 24 hours, currently trading at US$58,824 (AU$76,395).

That’s only about 4.6% below Bitcoin’s record high price of US$61,557, hit on 14 March, giving the world’s biggest crypto a current market cap of US$1.1 trillion.

According to data from CoinDesk, more than US$52 billion worth of Bitcoin has exchanged virtual hands in the last 24 hours.

Bitcoin price mania spreads to Ether price

While the soaring Bitcoin price has garnered the lion’s share of the financial news, Ether – the world’s second largest crypto with a market cap of US$243 billion – rather quietly hit its own new record high price over the Easter holiday weekend.

On Saturday 1 Ether was trading for an all-time high of US$2,151. Ether has retraced a bit since, currently trading for US$2,113. Still, that’s up a stellar 1,173% from 1 year ago, when you could have invested in Ether for US$166.

Part of the past week’s price gains appear related to Visa Inc’s (NYSE: V) announcement that the global payment giant will roll out a program to use USD Coin (a ‘stablecoin’) to settle transactions over the Ethereum network.

According to Konstantin Anissimov, executive director at cryptocurrency exchange CEX.IO (quoted by Bloomberg), “The latest backing from Visa Inc. appears to be giving the bulls a new reason to persist in their stride.”

Julius de Kempenaer, senior analyst at StockCharts.com adds, “We’re now really breaking higher and that will very likely attract buying activity. Ether is gaining in relative strength versus Bitcoin.”

Atop that, as Bloomberg reports:

[B]illionaire entrepreneur Mark Cuban’s comments about owning the digital asset and that it’s closest “to a true currency” have increased interest, in addition to the ongoing upgrade of the network, according to Greg Waisman, co-founder and COO of the global payment network Mercuryo.

Why a stabilising price may be good for Bitcoin

The Ether price gains may have outpaced Bitcoin’s price rise of late, but that may not be all bad news for Bitcoin’s outlook.

That’s because, as the analysts at JPMorgan Chase & Co point out, lower price volatility could draw in more institutional investors.

In a report last Thursday, the analysts wrote (sourced from Bloomberg):

These tentative signs of Bitcoin volatility normalization are encouraging. In our opinion, a potential normalization of Bitcoin volatility from here would likely help to reinvigorate the institutional interest going forward.

Institutional interest in Bitcoin from the likes of Elon Musk’s Tesla Inc (NASDAQ: TSLA) has already been widely credited with supporting the Bitcoin price recently.

Whether increased institutional investment into Bitcoin will normalise the crypto’s volatility or send the price even higher remains to be seen.

More reading

• What’s driving the Bitcoin price back towards new record highs?
• Goldman Sachs plans to let wealthy clients invest in Bitcoin
• Why Tesla stock jumped on Wednesday
• Here are the US shares ASX investors have been buying
• This company will make more electric cars than Tesla

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin and Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Skyfii Ltd (ASX: SKF) share price is falling today after the company announced it acquired pedestrian analytics company CrowdVision with $10 million in capital raising.

The Skyfii share price has fallen 7.5% to 18.5 cents per share. 

Skyfii is a data, marketing, communication and automation intelligence platform built for physical venues. The company’s flagship offering is its cloud-hosted proprietary platform, which collects and analyses data from smart devices to assist venues in improving operations, marketing initiatives and customer experiences.

Skyfii capital raising and CrowdVision venture

It was revealed six days ago that Australian company Skyfii, which is headquartered in New South Wales, would issue more than 60 million shares at 16.5 cents per share in order to buy U.S. company CrowdVision. 

CrowdVision is a North American-based company specialising in automated pedestrian analytics, which includes the tracking of people flow around a venue. It produces insights focusing on airports, stadiums, exhibition centres, and large-scale resort hotels and casinos.

Skyfii is operating in more than 11,000 venues across 35 countries with 59 employees and has an annual recurring revenue (ARR) of $11 million. CrowdVision will add ARR of $1.7 million and has a total enterprise value of approximately $9 million, but this hasn’t had a positive impact on the Skyfii share price today.

Skyfii is aiming to use its CrowdVision acquisition to better deliver a range of data intelligence products to suit the requirements of airports, stadiums, smart cities and universities.

One of the key aims of this deal is to expand into airports, with large growth expected in this sector following completion of the COVID-19 vaccine rollout. Skyfii is used in 30 airports globally and CrowdVision is in 35, more than doubling the company’s presence in this space. 

CrowdVision is the leading player in the U.S. airport pedestrian analytics space, with contracts covering nine of the country’s 15 largest airports. Skyfii says this industry has “very high barriers to entry” and is hoping this deal will allow it to corner a growing sector.

Skyfii share price snapshot

The Skyfii share price has fallen 15% this week, 9% this month and 5% in 2021. It’s lost ground against the technology sector on the ASX, however, it’s up 85% over the past 12 months.

More reading

• Bitcoin price mania spreads as Ether price hits record highs
• Why 88 Energy, Chorus, Incitec Pivot, & Santos shares are sinking
• The Raiz (ASX: RZI) share price is surging 9% higher today
• Netflix is crushing Disney in this fast-growing market
• Dexus (ASX:DXS) share price slips on asset divestment

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a strong gain. At the time of writing, the benchmark index is up 0.95% to 6,894.1 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are sinking:

88 Energy Ltd (ASX: 88E)

The 88 Energy share price has crashed 70% lower to 2.2 cents following the release of a very disappointing operational update. The exploration company has been looking for hydrocarbons via drilling operations at the Peregrine project in Alaska. However, due to a power outage from equipment failure and other challenges, the company was unable to sample its two most prospective zones. Management stated that it is now too late in the season to initiate flow testing operations and the forward program will consist of plugging the well.

Chorus Ltd (ASX: CNU)

The Chorus share price has fallen almost 4% to $6.20. This morning the New Zealand telco revealed that it has reduced its indicative Maximum Allowable Revenue (MAR) range to NZ$680 million to NZ$710 million. This compares to its previous range of NZ$715 million to NZ$755 million.

Incitec Pivot Ltd (ASX: IPL)

The Incitec Pivot share price has tumbled 8.5% lower to $2.67. Investors have been selling the agricultural chemicals company’s shares following an update on its Waggaman ammonia operation. This morning Incitec Pivot advised that the operation is expected recommence production later than previously expected. As a result, management expects an earnings before interest and tax (EBIT) impact of $36 million in FY 2021.

Santos Ltd (ASX: STO)

The Santos share price is down almost 2% to $7.00. Investors have been selling the energy producer’s shares on Tuesday following a pullback in the oil price overnight. Oil prices came under pressure amid concerns over OPEC ramping up production. The S&P/ASX 200 Energy index is down 0.35% this afternoon.

More reading

• ASX 200 up 0.9%: Cleanaway jumps, tech shares rise, Incitec Pivot sinks
• Why the Incitec Pivot (ASX:IPL) share price tumbled 10% this morning
• Why the 88 Energy (ASX:88E) share price dived 64% today
• Alliance (ASX:AQZ) share price flies on latest deal
• Why the Chorus (ASX:CNU) share price is on watch

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Raiz Invest Ltd (ASX: RZI) share price is flying more than 9% higher today, following a positive trading update from the company.

At the time of writing the Raiz share price is trading for $1.75. More than 8% higher for the day, after hitting an intra-day high of $1.76 earlier.

What did Raiz announce?

Earlier this morning, Raiz provided the market with an update on its performance for March 2021.

In the update, Raiz provided an insight on the company’s Australia, Indonesian and Malaysian operations for the month.

Raiz noted that global active customers increased 3.5% for the month to a total of 419,552 active users. The company’s management highlighted that active customer numbers grew despite an increase in monthly maintenance fees. Raiz attributed the strength of the company’s brand and value-add operations to customer loyalty.

In addition, Raiz highlighted that funds under management (FUM) in Australia increased 4.4% for the month to $694.27 million. The company noted that net inflows did not slow despite challenging market conditions and fee structure changes.

Raiz also noted that $1 billion in FUM by the end of 2021 remains a realistic target. The company recently achieved $700 million on the 1^st of April. Raiz also highlighted that Indonesian and Malaysian operations are exceeding expectations.

More on the share price

Raiz is a fintech company that operates a mobile-focused, micro-investing platform in Australia, Indonesia and Malaysia. The company’s platform enables users to micro-invest the remaining round-up of everyday purchases in exchange-traded funds (ETF). In addition, Raiz allows users to open a superannuation fund.

Depending on the user’s risk tolerance, the company’s mobile financial platform offers a range of different funds. Each fund allocates across a wide variety of financial products including Australian and international shares, fixed-interest investments and cash.

Raiz charges a flat monthly investment fee for each user which comprises more than 60% of the company’s revenue. Raiz recently increased its monthly maintenance fee from $2.50 to $3.50.

As a result, FUM and active customers are key metrics to the company’s ability to generate recurring revenue.

The Raiz share price has surged more than 86% since the start of 2021. Shares in the company more than doubled earlier in the year after hitting all-time highs of $2.20 in February.

More reading

• Netflix is crushing Disney in this fast-growing market
• Dexus (ASX:DXS) share price slips on asset divestment
• Why the Aroa Biosurgery (ASX:ARX) share price is lifting today
• 4 reasons why the Tyro (ASX:TYR) share price is rated as a buy
• Why the Codan (ASX:CDA) share price is jumping 7% to a record high

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Netflix (NASDAQ: NFLX) has been trying to crack the Indian market with various strategies ever since it entered the country five years ago.

And the streaming giant has made solid progress — London-based consultancy firm Omdia reports that Netflix and Disney‘s (NYSE: DIS) Disney+ Hotstar streaming platform together accounted for a whopping 78% of India’s $639 million video streaming revenue in 2020. Though the firm didn’t specifically point out Netflix’s share of this pie, a bit of number crunching tells us that Netflix has indeed become a big player in the country. Let’s see how.

Netflix’s premium pricing strategy is paying off

Omdia reports that Netflix and Disney+ Hotstar accounted for half of the video streaming subscribers in India last year. Disney’s offering reportedly tripled its 2019 subscriber base in 2020, going from 8 million users to 25.6 million, which doesn’t look surprising given its pricing structure.

Disney+ Hotstar offers three pricing plans in India, with the comprehensive premium plan priced at 1,499 rupees (approximately $20) per year. The same plan can be bought for a monthly subscription price of 299 rupees (approximately $4 at the current exchange rate), which makes the annual plan a better buy. Disney+ Hotstar also offers an ad-supported freemium model where subscribers don’t have to pay the monthly or annual subscription price in exchange for restricted access to the platform.

This is the reason why Disney’s average revenue per user (ARPU) remains low in the Indian market and fluctuates depending on the quarter in which the Indian Premier League (the country’s premier cricket competition) plays. As a result, the service saw its ARPU in India drop from $2.19 in the quarter that ended in September 2020 (when the season started) to $0.91 in the December 2020 quarter, indicating that paid subscriber sign-ups dried up after the league ended.

So taking the best-case scenario of $2.19 in APRU into account, Disney would have generated around $56 million in revenue in India in the September 2020 quarter (assuming it hit its peak of 25 million subscribers in that quarter). The company’s revenue in the quarter that ended in December 2020 would have dropped to just over $23 million, indicating that it generated nearly $80 million in revenue in the second half of the calendar year.

As such, Disney+ Hotstar’s revenue from India in calendar 2020 could have hovered around $150 million to $160 million if we extrapolate the revenue generated in the last six months to the full year. This means that Netflix may have cornered a bigger share of the country’s streaming revenue in 2020 — and that’s not surprising given its premium pricing plans.

The cheapest Netflix plan costs 199 rupees (approximately $2.70) per month in India. This is a mobile-only plan that allows users to stream in standard definition format on their smartphones or tablets. Sharing is not possible on this plan, as it supports only one screen. The more expensive monthly plans are priced at 499 rupees ($6.80), 649 rupees ($8.84), and 799 rupees (approximately $10.90). There are no annual plans on offer, nor does Netflix offer any regular free access.

Netflix clearly earns more revenue per user per month than Disney. Given that it had an estimated 4.6 million paying subscribers in 2020, and assuming that each of them paid the minimum subscription price of $2.70 a month, Netflix would have easily made close to $150 million in India last year. However, Netflix’s ARPU in India is estimated to have been $5 per month according to a third-party estimate, which means that the company’s actual India revenue last year could have been close to double that of Disney’s take, assuming 4.6 million paying subscribers. So there’s a strong possibility that Netflix took the lion’s share of the streaming revenue in India last year based on Omdia’s estimate.

The road ahead looks bright

The good news for Netflix is that its mobile-only plan seems to be a hit among the Indian consumers. The company’s revenue in India in fiscal 2020 (which ended in March last year) reportedly doubled year-over-year following the launch of the mobile-only plan in mid-2019.

That isn’t surprising, as Omdia estimates that 82% of users in India stream video on their smartphones. Netflix is now looking to offer a better experience to its mobile customers through its “Mobile+” plan, which offers high-definition streaming. The plan is currently in a pilot phase and is priced at 299 rupees (approximately $4.07) per month, indicating that the company is looking to drive additional spending and push up its ARPU.

The success of this plan could unlock more riches for Netflix in India, as the online video streaming market in India is expected to hit $4.5 billion in revenue by 2025, according to Media Partners Asia. Mobile devices are likely to account for a significant chunk of that pie, as most of the content consumption is expected to take place on that platform.

Netflix looks all set to make a bigger dent in India’s fast-growing streaming market, where the company has been investing aggressively in content and is trying out smart ways to woo more customers.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Netflix is crushing Disney in this fast-growing market appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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