Despite 34 Mn Users, Disney+ Hotstar Pulls Down Disney+’s ARPU By 30%

Video streaming platform Disney+Hotstar has weighed on the average revenue per user for Disney+ for the quarter ended April 3, 2021. Disney+ Hotstar operates only in India and Indonesia.Walt Disney, in its quarterly financial report, highlighted that Disney+ Hotstar average monthly revenue per paid subscriber is significantly lower than the average monthly revenue per paid subscriber for Disney+ in other markets.

The company further adds that the average monthly revenue per paid subscriber for Disney+ decreased from $5.63 to $3.99, or by 30%, due to the launch of Disney+ Hotstar. Disney had acquired Hotstar in 2019 and launched Disney+ Hotstar for the Indian market in April 2020. The over-the-top (OTT) platform was launched in Indonesia in September 2020.

Revenue per paid subscriber is calculated based on the average of the monthly average paid subscribers for each month in the period, Walt Disney explained in its financial report. The monthly average paid subscribers is calculated as the sum of the beginning of the month and end of the month paid subscriber count, divided by two.

Disney+ average revenue includes subscription fees, advertising and premium and feature add-on revenue, but excludes premier access, pay-per-view revenue and revenue earned from selling advertising spots to other company businesses..

Notably, Disney+ Hotstar continues to make up for a third of Disney+’s user base in the first quarter of 2021 as well. Given that Disney+’s reported a user base of 103.6 Mn at the end of March quarter, which means that about 34 Mn subscribers from India and Indonesia through Disney+ Hotstar.

Previously, Disney’s CFO Christine McCarthy during an earnings call in February 2021 had also reiterated that Disney+ Hotstar accounts for 30% of its 94.9 Mn global users, indicating that the video streaming platform has 28.5 Mn users in India.

In the financial year 2020, between April 2019 to March 2020, Disney+ Hotstar reported a 50% jump in revenue, with 35% lower losses. The company’s revenue grew from INR 1,123 Cr in FY2019 to INR 1628 Cr in FY2020. Hotstar reported a loss of INR 361.8 Cr in FY20 compared to INR 554.3 Cr.

While its revenue is over INR 700 Cr higher than Netflix India’s INR 923.7 Cr, the company was not able to hit profitability. Netflix India, on the other hand, reported a profit of INR 8.92 Cr in FY20.

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