SUMMARY
The overall subscriptions of Disney+ will come down to around 215-245 Mn by FY24 from the initial guidance of 230-260 Mn
Disney+Hotstar had 58.4 Mn paid subscribers as of July 2, 2022, up 30% year-on-year
Reliance-owned Viacom18 beat Disney Star to win IPL’s digital rights for the next five seasons, ending Disney’s five-year monopoly on all IPL broadcasting rights
The Walt Disney Co. has reduced the subscriber target for Disney+Hotstar, its subscription service in India and some other parts of Asia, to 80 Mn by the end of FY24 from 100 Mn earlier. The overall subscriptions of Disney+ will come down to around 215-245 Mn by FY24 from the initial guidance of 230-260 Mn.
During the company’s earnings call, Christine McCarthy, senior executive vice-president and chief financial officer at Walt Disney, said, “We are updating subscriber guidance for Disney+ Hotstar to up to 80 Mn subscribers by the end of fiscal 2024.”
McCarthy said that Walt Disney will refine this target further after 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,” McCarthy added.
Disney’s move comes after Disney+Hotstar lost the rights to stream the Indian Premier League (IPL), India’s most lucrative sporting league and the second-richest sports league in the world in terms of per match revenue earned via TV and streaming.
Disney+Hotstar had 58.4 Mn paid subscribers as of July 2, 2022, up 30% year-on-year from the 44.9 Mn a year before.
According to the company’s earnings report, the average monthly revenue per paid subscriber for Disney+Hotstar reached $1.20, owing to higher per-subscriber advertising revenue. Disney, as a whole, recorded a higher advertising revenue during the fiscal due to IPL matches, it added.
Earlier, several media and OTT analysts told Inc42 that Disney+Hotstar was set to lose up to 25 Mn subscribers in India after failing to win IPL’s digital rights for the next five seasons. Reliance-owned Viacom18 beat Disney Star to get IPL’s digital rights, ending Disney’s five-year monopoly on all IPL broadcasting rights.
Viacom18 won the digital rights for both exclusive and non-exclusive matches, Packages B and C, for a collective INR 23,758 Cr for the next five years, while Disney had to make do with the TV rights, or Package A, for INR 23,575 Cr.
Disney Star depended on the high demand for sports content in India to build Disney+Hotstar. It also added sporting events such as Formula 1, the English Premier League and FA Cup to its roster.
Disney+Hotstar’s reliance on IPL was such that McCarthy, during the previous earnings call in April, called it the primary reason for the platform’s growth. However, with IPL gone, the OTT platform has lost its biggest product, leading to speculations of an exodus of subscribers.
Karan Taurani, senior vice president at Elara Capital, told Inc42 earlier that the OTT platform could lose as much as 50% of its subscriber base and it would need strong original content to make a comeback.
India’s OTT revenue will grow to about $4.5 Bn by 2026, as per Media Partners Asia. According to a report by Omdia, Indian OTT platforms spent $500 Mn on original content in 2021.
Disney+Hostar will face stiff competition from other OTT players in India like Amazon Prime Video, ZEE5 and SonyLiv, among others.
