BackDisney+ Hotstar subscriber base dips by 8% in March quarter; eyes lower content volume
Disney+ Hotstar will remove certain content from its streaming platforms and expects to take an impairment charge of $1.5-$1.8 billion.
PremiumDisney+ Hotstar, the video streaming service owned by the Walt Disney Co has reported an 8% drop in subscriber base to 52.9 million in January-March quarter as the media and entertainment conglomerate looks at lower content volume.
Previously, the platform, which is known as Disney+ Hotstar, in India and other Asian countries such as Malaysia, Thailand and Indonesia, had seen subscriber count dip by 6% to 57.5 million from 61.3 million in the October-December quarter. This essentially makes for a loss of 8.4 million subscribers over the past six months.
Average monthly revenue per paid subscriber dipped by 20% from $0.74 to $0.59 for Disney+ Hotstar in Q2. The company follows an October to September financial year. Overall, the Walt Disney Co saw its video streaming platform Disney+ lose paid subscribers by 2% to 157.8 million in the March quarter.
In India, Disney Star, the media firm owned by the Walt Disney Co has given up the digital rights to stream the Indian Premier League (IPL). Starting 31 March, Disney Star has also removed 144 HBO originals as the company decided against extending its longstanding content deal with Warner Bros. Discovery, the parent firm of HBO. Media analysts have estimated a 30% loss of subscribers thanks to the change in strategy.
“We are in the process of reviewing the content on our DTC (direct-to-consumer) services to align with the strategic changes in our approach to content curation. As a result, we will be removing certain content from our streaming platforms and currently expect to take an impairment charge of approximately $1.5 billion to $1.8 billion. And going forward, we intend to produce lower volumes of content in alignment with this strategic shift," Christine McCarthy, senior executive vice-president and chief financial officer said during an earnings call. McCarthy added that streaming losses for the firm had peaked in the last quarter of 2022 that were reported in November and the next two quarters have shown an improvement. “There’ll be that one little blip in Q3, and then we expect to be back on the path for the balance of the fiscal year," she added.
Bob Iger, who was reappointed chief executive of Disney in a surprise move last November, had stated earlier that the company would be slashing its workforce by 7,000 besides targeting $5.5 billion of cost savings across the company, including $3 billion in savings on the content side.
“As we grow the business in terms of the global footprint, we realized that we made a lot of content that is not necessarily driving subscriber growth, and we’re getting much more surgical about what it is (that) we make. So, as we look to reduce content spend, we’re looking to do so in a way that should not have any impact at all on subscriptions. We believe that there’s an opportunity for us to focus more on real subscriber drivers," Iger said during an earnings call citing the example of tentpole movies such as Avatar- The Way of Water, Indianan Jones and Guardians of the Galaxy that couldn’t be allocated enough marketing spends earlier. “We actually believe we have an opportunity to lean into those more, allocate away from programming that was not driving any subscriptions at all," he said.
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