The JioCinema Effect? Disney+Hotstar Loses 12.5 Mn Subscribers In June Quarter

Disney+Hotstar has lost 12.5 Mn subscribers during the quarter ended June 30, 2023, The Walt Disney Company’s regulatory filings showed.

According to Disney’s filings, the OTT platform had 52.9 Mn subscribers as of April 1, 2023, which fell 24% to 40.4 Mn as of July 1, 2023. Overall, Disney+ gained 0.8 Mn subscribers during the June 2023 quarter.

In its Q2 FY23 earnings report, Walt Disney said Disney+Hotstar’s subscribers dropped by 4.6 Mn in the January-March 2023 quarter from the previous quarter. The platform has lost more than 17 Mn subscribers since January 2023.

Right after losing IPL rights to JioCinema parent Viacom18, Disney cut the subscriber target for Disney+Hotstar to 80 Mn by the end of FY24 from 100 Mn earlier. Media industry analysts also expected that the streaming major would lose around 20-25 Mn subscribers due to the absence of IPL on its platform. 

Incidentally, Disney’s direct-to-customer (DTC) business saw its revenue increase 9% quarter-on-quarter (QoQ) to $5.5 Bn, as its operating loss fell to $0.5 Bn from $1.1 Bn in the previous quarter.

“Disney+ Hotstar subscribers declined this quarter as we adjusted our product from one centred around the IPL to one more balanced with other sports and entertainment offerings. I would also note that this business with its significantly lower ARPU compared to core Disney+ is not a material component of our overall D2C financial results,” Walt Disney interim chief financial officer Kevin Lansberry said in an earnings call.

Disney+Hotstar’s average monthly revenue per paid subscriber stood at $0.59 (INR 48.88), a far cry from the international average of $6.01 (INR 497.88) and 50% less than the $1.20 during the same quarter last year.

“The decreases in sports programming costs and advertising revenue reflected the comparison to IPL cricket programming in the prior-year quarter, as we did not renew the digital rights beginning with the 2023 season,” said The Walt Disney Company in its filings for the reason of a decline in subscriber count and advertising revenue.

To be sure, Disney+Hotstar has had a rough time of it in recent quarters. Last year, Disney Star lost out on the digital broadcast rights for the Indian Premier League (IPL), one of the biggest sports IPs in the world. Since then, it has lost rights to Formula 1 and HBO content.

In perhaps a bitter blow, IPL and content from HBO have all gone to emerging rivals JioCinema, as it won the digital broadcast rights for IPL last year. On the other hand, FIA, Formula 1’s governing body, has decided to gatekeep broadcast on its native app, F1 TV.

The development also comes a month after it was reported that Disney was exploring strategic options for its Star India business, including a joint venture or a sale.

In other news, Disney+Hotstar has also followed in the footsteps of its rival Netflix in introducing a new password-sharing policy, limiting the number of devices users can log in from. The new policy will be implemented later this year, per media reports.