Disney+ Hotstar, the Indian streaming service of The Walt Disney Company, saw a subscriber growth of 42 per cent between October 2021 and October 2022. Hotstar subscribers at the end of the fourth quarter (Q4FY22) — Disney follows the October-to-September fiscal calculation — stood at 61.3 million vis-a-vis 43.3 million in the year-ago period.
The company, however, projects a fall in Hotstar’s subscriber growth in the coming quarter (Q1 FY23) due to the absence of the IPL property on the platform. Earlier this year, Mukesh Ambani-led Viacom18 piped Hotstar to win the digital streaming rights of the coveted cricket league from 2023 to 2027. IPL remains the premier money magnet in India’s OTT landscape, with its digital viewership projected to touch 523 million in FY23, according to a FICCI-EY report.
Highlighting the impact of IPL’s absence, Disney CFO Christine McCarthy said in the earnings call, “At Disney+ Hotstar, we are currently expecting that subscribers will decline in Q1 due to the absence of the IPL, but we do expect to see some stabilization in Q2.”
In earlier conversations with Business Today, media analysts reckoned that Disney+ Hotstar could face an existential challenge in the absence of IPL. It currently enjoys a 22 per cent share in India’s subscription video-on-demand (SVOD) segment, “which may drop sharply, with people potentially moving to Voot or Jio to watch IPL”, explained Karan Taurani, SVP at Elara Capital.
According to Taurani, Hotstar could lose at least 30-40 per cent paid subscribers in the next six to eight months as their subscriptions expire, which is pretty much in line with Disney’s own estimates. “IPL drives 60-65 per cent of Hotstar numbers. If they don’t replenish it with new cricket rights, the drop will be sharper,” Taurani told Business Today.
Disney+ Hotstar also faces the challenge of dropping Average Revenue Per Paid Subscriber (ARPPS). Despite overall subscriber growth in the last one year, the platform’s monthly ARPPS fell 9 per cent from $0.64 (~Rs 53) to $0.58 (~Rs 47.5), according to its earnings statement.
“The average monthly revenue per paid subscriber for Disney+ Hotstar decreased due to lower per-subscriber advertising revenue and a higher mix of wholesale subscribers, partially offset by an increase in retail pricing,” Disney stated. “The slightly lower advertising revenue at Hulu and Disney+ Hotstar also impacted direct-to-consumer revenue in the fourth quarter relative to the third quarter,” it explained.
Globally, however, the streaming giant’s ARRPS (excluding Disney+ Hotstar) increased marginally from $5.62 to $5.83 at the end of Q4 FY22. Disney+ added over 12 million subscribers across the world, of which nearly 3 million additions came from Disney+ Hotstar.
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