Disney scales down subscriber target for Hotstar | Mint
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Business News/ Companies / News/  Disney scales down subscriber target for Hotstar
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Disney scales down subscriber target for Hotstar

Walt Disney Co. has lowered its subscriber guidance for Hotstar to 80 million by the end of fiscal 2024 from 70-100 million projected earlier

Disney+ Hotstar named Koffee With Karan as one of its most popular shows in India. (Twitter)Premium
Disney+ Hotstar named Koffee With Karan as one of its most popular shows in India. (Twitter)

The Walt Disney Co. has lowered its subscriber guidance for Hotstar, its over-the-top (OTT) video streaming service in India and other Asian countries, to 80 million by the end of fiscal 2024 after the loss of rights to stream the Indian Premier League online. The platform had earlier projected the user base at 70-100 million.

This will bring the overall subscriptions for Disney+, down to 215-245 million globally in the same period, as compared to the previous guidance of 230-260 million. Overall, Hotstar added 8 million subscribers in the April to June quarter, said The Walt Disney Co.

in a statement announcing its June quarter earnings. The company also named Koffee With Karan as one of its most popular shows Disney+ Hotstar in India.

As a whole, Disney+ added 14.4 million subscribers globally in the April to June quarter. The company said that Hotstar would continue to contribute 60-70% of the total subscriber base in the times to come. Disney+ Hotstar is present in India and other Asian countries such as Malaysia, Thailand and Indonesia, with 58.4 million subscribers at the end of the quarter while overall Disney+ subscribers have breached the 150 million mark worldwide. The average monthly revenue per paid subscriber for Disney+ Hotstar has increased from $0.78 to $1.20 due to higher per-subscriber advertising revenue, the company said.

“We are updating subscriber guidance for Disney+ Hotstar to up to 80 million subscribers by the end of fiscal 2024. We intend to refine this target over time as subscriber visibility in India will be clearer once the ICC and BCCI cricket rights sales processes are completed. We recently made the disciplined decision to not proceed with the Indian Premier League digital rights and we’ll evaluate these rights with that same discipline," Christine McCarthy, senior executive vice-president and chief financial officer at Walt Disney said during the earnings call. The company remains confident that Disney+ will achieve profitability in fiscal 2024 as it reaches a steady state of tentpole original content releases, delivery of premium general entertainment, international local originals and the upcoming launch of its ad-supported tier alongside a new pricing structure for the US, McCarthy added.

Disney chief executive officer Bob Chapek said the company is excited to continue offering IPL to its linear customers in India where growth potential exists for its portfolio of more than 70 channels that reach 90% of pay cable and satellite TV homes in the region. “Pay TV distribution in India continues to be a robust business with projected GDP growth expected to drive advertising and consumer spending. In fact, India is one of the only markets in which we are launching new linear channels," Chapek said during the earnings call.

To be sure, several analysts had predicted Hotstar might lose up to 50% of its paid subscribers as IPL moves to Reliance-owned digital platforms. Reliance Industries-owned Viacom18 recently won the digital streaming rights to the IPL for Rs. 23,758 crore for 2023-27. However, the Walt Disney-owned service is making a conscious effort to beef up its entertainment content to prevent subscribers from leaving the platform, including buying big-ticket films and bringing fresh web originals.

It is ramping up its slate of south Indian films with Kamal Haasan’s Tamil hit Vikram premiering last month. It also announced a slate of web shows such as the third season of crime thrillers Aarya, starring Sushmita Sen and Criminal Justice featuring Pankaj Tripathi, and a show with YouTuber Bhuvan Bam titled Taaza Khabar, among others. Its chat show Koffee With Karan continually features in the weekly list of top five OTT offerings curated by media consulting firm Ormax, with the last episode having garnered 5.8 million views. Besides direct-to-digital releases such as Good Luck Jerry, Hotstar will also bank on its international originals, including those from the Marvel universe, dubbed in multiple languages to woo young audiences, media analysts said.

“Hotstar has the advantage of a huge international movie catalogue from Disney, including Marvel, with which there is always an opportunity for dubbing. In the coming months, it will also go aggressive on its own (Indian) original slate which will raise overall cost of production in the industry," Karan Taurani, senior vice-president at Elara Capital Ltd had told Mint in an earlier interview.

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ABOUT THE AUTHOR
Lata Jha
Lata Jha covers media and entertainment for Mint. She focuses on the film, television, video and audio streaming businesses. She is a graduate of the Columbia School of Journalism. She can be found at the movies, when not writing about them.
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Published: 11 Aug 2022, 02:25 PM IST
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