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Disney+ Hotstar May Lose 15 Million Subscribers after Failing to Win IPL Digital Rights | 2YODOINDIA

Disney+ Hotstar May Lose 15 Million Subscribers after Failing to Win IPL Digital Rights

Walt Disney’s video streaming service Disney+ Hotstar may face a significant impact on its 50-million subscriber base after failing to secure the consolidate digital streaming rights for the Indian Premier League (IPL) tournament.

Disney+ Hotstar could potentially lose 15 million subscribers after failing to secure the IPL digital rights, according to Vivek Couto, Executive Director at Media Partners Asia, a Singapore-base research and consulting firm.

This could further impact Disney+ Hotstar forecast of achieving 230-260 million subscribers by 2024 and hurt its ambitions to take on global market leader Netflix.

Viacom18 had secure the consolidated IPL digital streaming rights for the Indian subcontinent for Rs 23,758 crore for the 2023-2027 period in the recently conclude IPL media rights auction.

Walt Disney’s India subsidiary Disney Star had bag the five-year television rights for the Indian Premier League at Rs 23,575 crore.

Vivek Couto noted that Disney will still control valuable television ad inventory.

Vivek Couto Said :

“IPL TV distribution fees are solid for Star / Disney India but because of structural dynamics have impact past two years, it could be open to disruption from Viacom18 streaming play and Jio distribution across mobile and home broadband,”.

Disney Star said in a statement that it will focus on growing its slate of original entertainment content for Disney+ Hotstar and its television channels in the region, apart from exploring other multiplatform cricket rights.

Rebecca Campbell, Chairman, International Content and Operations, The Walt Disney Company Said in a statement :

“We made disciplined bids with a focus on long-term value. We chose not to proceed with the digital rights given the price required to secure that package. As we will be exploring other multiplatform cricket rights, including future rights for International Cricket Council (ICC) and Board of Control for Cricket in India (BCCI), which we currently hold through the 2023 and 2024 seasons, respectively,”.

Rebecca Campbell also mention that they hold rights for Pro Kabaddi League, and Indian Super League football, as well as various international sports rights, including the Wimbledon Championships and the English Premier League.

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Abneesh Roy of Edelweiss Said :

“Hotstar would need to go back to planning with a higher focus on non-sports. Hotstar was getting a significant amount of the subscribers and revenues due to IPL,”.

The IPL tournament has one of the major subscriber growth drivers for Disney+ Hotstar and was consider key to the future growth of the streaming service that recently cross the 50 million paid subscriber mark.

Disney+ Hotstar account for about 36.4 percent of the total paid subscriber base of Walt Disney’s flagship streaming service Disney+ that stood at 137.7 million for the second fiscal quarter ended April 2, 2022.

The Disney+ Hotstar also account for nearly half of Disney+’s quarterly subscriber growth.

Disney+ Hotstar has a major drag on Disney+’s overall average revenue per user (ARPU) due to its significantly lower prices.

The company made only $0.76 per month from an average Disney+ Hotstar member as compared to $6.32 per month from an average Disney+ customer in the United States or $6.35 per month from an average International customer (excluding Disney+Hotstar).

Disney+ said in May 2022 that it earn an overall average of $4.35 per month from each customer in Q2-FY22. 

So, if Disney+ Hotstar is exclude, the ARPU rose to $6.33 per month.

In February 2022, Disney CEO Bob Chapek had said during the company’s earnings conference call that the local content they were developing, including the library content from its own brands Disney, Pixar, Marvel, Star Wars and Nat Geo, would mitigate the impact if they don’t win the auction.

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Rebecca Campbell said that they currently have more than 100 local original titles in their content pipeline with over 80 local originals slated to premiere this fiscal year.

She also claim that the service “was home to seven of the top ten Hindi SVOD (Subscription-based video on demand) entertainment series in India” without disclosing any further details.

As Reliance Industries Ltd, which owns 51 percent in Viacom18, is the sole beneficiary of Independent Media Trust that controls Network18 Media & Investments Ltd.

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