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Will Disney Plus improve Hotstar's subscription revenue, disrupt Netflix, Amazon's market in India

Walt Disney management has announced that their OTT offering would be bundled with Hotstar's premium offerings, Hotstar VIP (priced at Rs 365 per year) and Hotstar Premium (Rs 999)

twitter-logo Ajita Shashidhar   New Delhi     Last Updated: February 6, 2020  | 19:55 IST
Will Disney Plus improve Hotstar's subscription revenue, disrupt Netflix, Amazon's market in India
Disney Plus to launch in India in partnership with Hotstar on March 29

India's largest OTT platform which boasts of close to 400 million monthly active subscribers, Hotstar, will be rechristened as Hotstar Disney Plus on March 29. This would mean the entire library of Disney, Pixar, Marvel, Star War and National Geographic content, along with Disney Plus originals such as The Mandalorian, would be available to Indian consumers on a single platform (along with Hotstar's existing catch-up TV, originals and sports content). The first thought that comes to mind is will the launch of Disney Plus in India lead to the further decline of linear English TV channels (which are already languishing with reach plunging by over 50 per cent in the new tariff regime, where consumers have the liberty to subscribe to only those channels they wish to view).

"Linear English TV has been a non-starter for all Indian broadcasters. These channels worked only because they were offered as part of larger bouquets," says media and entertainment industry expert, Ashish Kaul. In fact, relatively late OTT entrants such as Lionsgate Play (which only offers Hollywood content) are known to have benefitted from the collapse of English linear channels in the new tariff regime. "I can hear the bell ringing. There is already pressure on tariff which is making them unviable and there is pressure from OTTs too," agrees Vikram Malhotra, Founder, Abundantia Entertainment.

Disney Plus has garnered a whopping 28.6 million consumers in the US in the very first quarter of launch, will it get similar traction in India too? The Walt Disney management has announced that their OTT offering would be bundled with Hotstar's premium offerings, Hotstar VIP (priced at Rs 365 per year) and Hotstar Premium (Rs 999). According to a senior media planner, out of the 400 million monthly active user base of Hotstar, it has around two million premium subscribers and around four-five million VIP subscribers. Hotstar VIP offers original content and sports in language feeds, whereas the premium service offers premium English content and live sports in addition to all the content that VIP offers. While Disney-Star will certainly hope for a huge take off in its premium subscriber base with Disney Plus coming on board, it will be interesting to see how the media and entertainment conglomerate will localise the Disney Plus content on Hotstar VIP. "Avengers Endgame, for instance, saw a huge traction on Hotstar VIP as it was offered in language feeds," explains the media planner. Hotstar Disney Plus is being launched alongside the forthcoming season of Indian Premier League, so, media planners are expecting a lot of content localisation for it to get traction on Hotstar VIP. "It is being bundled with Hotstar as Disney knows that there will be limited takers for Disney Plus in India," adds the media planner.

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It will be interesting to see the kind of pricing slabs that Hotstar Disney Plus would introduce. Will it be as expensive as Netflix (Rs 649-Rs 799 per month) in India? "I don't think so. The Rs 649 pricing of Netflix didn't really work in India. They were forced to come up with a Rs 199 price point which enables consumers to watch only on their mobiles. I expect a max 15%-20% increase in the Hotstar VIP tariff," says the media planner.

Will Hotstar Disney Plus grow at the expense of Netflix, Amazon Prime Video and other OTT platforms in India? "While we are going to see a large existing player getting bigger and more varied, I continue to believe that the market is so untapped in India that the pie is large enough for everybody to continue prospering. I don't think the Disney Plus game will be at the cost of a Netflix or Amazon," says Malhotra of Abundantia. In fact, Kaul doesn't expect Disney Plus to cause any concern for the likes of Netflix for at least the next couple of years. "Netflix already has a four-year edge over Disney Plus in India. It will take Disney at least a couple of years to organise itself. The battle will begin after that," he says.

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Industry experts believe the launch of Disney Plus in India to lead to a substantial increase in Hotstar's subscription revenue. "Everybody is investing to grow their platform technology and content to acquire more subscribers and Hotstar Disney Plus will be in investment mode too. However, I certainly see subscription revenue becoming substantially higher for Hotstar, so it should have a favourable financial impact," points out Malhotra. After all, premium audience seeking out for Hollywood content in India is in the region of 25-30 million and is likely to go up to 50 million consumers. Globally, Disney Plus has partnered with the likes of Apple TV and LG to offer embedded content. With premium consumers increasingly watching OTT content on larger screens in India as well, offering embedded content to TV manufacturers could be an important revenue source for Hotstar Disney Plus.

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