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Forget IPL, Disney+Hotstar sees first jump in paid subscribers
In Q1, paid users went up by 2% to 38.3 million from 37.6 million.
Disney+ Hotstar, the video streaming service owned by the Walt Disney Co known in India and other Asian markets, witnessed its first ever increase in paid subscribers since the loss of the digital rights to stream the IPL (Indian Premier League) last year.
In Q1 (the company follows an October to September financial year), paid users went up by 2% to 38.3 million from 37.6 million at the end of the September quarter.
However, core Disney+ subscribers dropped by 1% to 46.1 million. The Disney+ Hotstar service has seen a steady decline in its subscriber base in recent months. It had 61.3 million subscribers at the end of September 2022 but witnessed a dip since Disney Star lost the digital rights to stream IPL last year to rival Viacom18.
Disney had said in its quarterly earnings report last August that it had lost more than 12 million streaming subscribers in India in three months due to the result of customer cancellations after losing IPL rights.
However, the company continues to hold other sports rights in the country. At the same time, Star India widened operating losses to $315 million due to the airing of the ICC Cricket World Cup in the current quarter compared from $129 million due to the ICC T20 World Cup, a smaller event in the prior-year quarter. “This resulted in an increase in programming and production costs attributable to higher average costs per match and more matches aired (besides) advertising revenue growth due to more units delivered and an increase in average viewership, partially offset by a decrease in rates,” Disney said in a statement.
Starting 31 March 2023, Disney Star also decided not to renew its deal with Warner Bros Discovery for the exclusive streaming rights of 144 HBO originals in an attempt that media experts attribute to cost cuts. The platform, known as Disney+ Hotstar in India and other Asian countries such as Malaysia, Thailand and Indonesia, has continually stressed on a move to general entertainment programming beyond sports.
“We are on track to meet or exceed $7.5 billion in cost savings as we continue to look for further efficiency opportunities across the company,” chief executive officer Bob Iger said during an earnings call.
In Q1, Disney+ Hotstar ARPU (average monthly revenue per user) increased from $0.70 to $1.28 due to higher advertising revenue and increases in retail pricing, partially offset by a higher mix of subscribers from lower-priced markets, the company said.
Walt Disney that has collaborated with Fox Corp and Warner Bros Discovery to create a new sports streaming service, has also invested $1.5 billion to acquire an equity stake in Epic Games. The transaction is subject to customary closing conditions, including regulatory approvals. “This marks Disney’s biggest entry ever into the world of games and offers significant opportunities for growth and expansion,” Iger said in a statement.
The developments come in the backdrop of Mukesh Ambani's Reliance Industries Ltd, reportedly nearing a deal with Walt Disney to buy its assets in India. Mint has reported that talks between Reliance and Disney have reached an advanced level for Disney Star to transfer most of its entertainment assets—linear TV and digital businesses—into a new entity. Reliance will pick up a 60% stake in this new company for around $2.28 billion–$2.4 billion, valuing Disney’s India assets between $3.8 billion and $4 billion.
The combination of Disney India and Reliance will leave little for others to do on the sports front, said Anuj Gandhi, media analyst and founder of Plug and Play Entertainment, a media tech startup.
The new entity will also gain dominance in the English language content category and with TV programming from the entertainment channels they operate. Between them, the two will have both satellite and digital rights to the IPL besides other cricket and tennis properties.
“Reliance has both a repertoire and an interest in sports. The sense is that they will stick to it, leaving things like, say, movie buying to players such as Netflix and Prime Video," Gandhi told Mint.
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First Published:8 Feb 2024, 09:45 AM IST
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