Disney+Hotstar’s Net Loss Narrows 43% YoY To INR 343 Cr In FY22, Operating Revenue Doubles

Novi Digital Entertainment, which operates video streaming service Disney+Hotstar, reported a 43% decline in its net loss to INR 343.16 Cr in FY22 from INR 600.77 Cr in FY21 on the back of a sharp rise in its operating revenue.

The streaming platform’s operating revenue jumped 93% to INR 3,220.41 Cr from INR 1,670.53 Cr in the previous fiscal year, as per data sourced from business intelligence platform Tofler. Its total revenue stood at INR 3,259.23 Cr in FY22, an increase of 91% from INR 1,704.03 Cr in FY21.

“Disney+ Hotstar has been downloaded by more than 500 Mn users, making it one of the most in-demand apps in India. Further, Disney+ Hotstar has had up to 221 Mn monthly active users during 2021-2022,” the company said.

The company saw almost 2X growth in its advertisement revenue to INR 1,684.31 Cr in FY22 from INR 829.74 Cr in FY21. In addition, its subscription revenue rose 65.67% to INR 1,373.61 Cr from INR 830.96 Cr in FY21.

Over the past few years, Disney+Hotstar has emerged as one of the leading over-the-top (OTT) services in India. While the streaming service was initially focused on catch-up and sports content, it expanded its original content portfolio after being rebranded as Disney+Hotstar after the Fox-Disney deal.

In FY22, Disney+Hotstar’s total expenses jumped 39.7% to INR 3,822.11 Cr from INR 2,304.8 Cr in FY21.

Expenses on advertisement and promotions rose 1.5X to INR 704.46 Cr from INR 479.63 Cr in FY21. Employee benefit expenses also grew 1.4X to INR 291.1 Cr from INR 214.38 Cr in FY21.

It must be noted that Disney+ Hotstar saw a decline in average revenue per user (ARPU) in the quarter ended October 1, 2022 despite subscriber addition.

“The average monthly revenue per paid subscriber for Disney+ Hotstar decreased from $0.64 to $0.58 due to lower per-subscriber advertising revenue and a higher mix of wholesale subscribers, partially offset by an increase in retail pricing,” Disney said in its earnings release.

It saw nearly 5% quarter-on-quarter increase in subscriber base with the addition of 2.9 Mn paid subscribers for the quarter ended October 1, 2022, reaching a total subscriber base of 61.3 Mn.

More importantly, Disney’s chief financial officer Christine McCarthy also said that there might be a decline in the subscriber base of Disney+ Hotstar in the ongoing quarter as well due to the absence of the Indian Premier League (IPL).

Ending Star India’s five-year monopoly on IPL rights, Viacom18 bagged the digital streaming rights of IPL for 2023-27 period.

In India, Disney+ Hotstar competes against the likes of Amazon Prime Video, Netflix, zee5, Voot, SonyLIV, MX Player, among others.

According to a Deloitte report, the overall OTT space in India is expected to grow at a CAGR of more than 20% to reach $13 Bn−$15 Bn over the next decade. The subscription-based video on demand market is expected to grow to $2.1 Bn from the current $0.8 Bn over the same period.