Disney+ Hotstar sees user exodus as IPL rights end

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NEW DELHI :The loss of Indian Premier League (IPL) streaming rights blew a hole in the subscriber base of Disney+ Hotstar in the June quarter, with 12.5 million users choosing not to renew their subscriptions. Walt Disney Co. said the subscriber base at its video streaming platform shrank 24% from 52.9 million to 40.4 million, the sharpest fall in any quarter yet.

NEW DELHI :The loss of Indian Premier League (IPL) streaming rights blew a hole in the subscriber base of Disney+ Hotstar in the June quarter, with 12.5 million users choosing not to renew their subscriptions. Walt Disney Co. said the subscriber base at its video streaming platform shrank 24% from 52.9 million to 40.4 million, the sharpest fall in any quarter yet.

Disney+ Hotstar has been witness to a steady decline in its subscriber base in recent months; the service, which had 61.3 million subscribers at the end of September 2022, has lost more than 20 million—or 34.18% of subscribers—since then.

Disney+ Hotstar has been witness to a steady decline in its subscriber base in recent months; the service, which had 61.3 million subscribers at the end of September 2022, has lost more than 20 million—or 34.18% of subscribers—since then.

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The platform is known as Disney+ Hotstar in India and other Asian countries such as Malaysia, Thailand and Indonesia. Its average revenue per user (Arpu) remained flat for Hotstar in the third quarter. It follows an October to September fiscal year. Overall, Walt Disney saw its video streaming platform Disney+ gain subscribers by 1%, from 104.9 million to 105.7 million.

“We aggressively reduced costs across the enterprise, and we’re on track to exceed our initial goal of $5.5 billion in savings. And perhaps most importantly, we’ve improved our DTC (direct-to-consumer) operating income by roughly $1 billion in just three quarters as we continue to work toward achieving DTC profitability by the end of fiscal 2024,” Bob Iger, chief executive, Disney said during an earnings call.

Three businesses—film studios, parks business, and streaming—will drive the greatest growth and value creation for the company over the next five years, he said. All three are inextricably linked to brands and franchises.

In India, Disney Star, the media company owned by Walt Disney, lost the digital rights to stream IPL last year to rival Viacom18. Starting 31 March, Disney Star also decided not to renew its deal with Warner Bros. Discovery Inc. for the exclusive streaming rights of 144 HBO originals in an attempt that media experts attribute to cost cuts.

Kevin Lansberry, interim chief financial officer, said the company is more focused on overall economics versus pure subscription growth. “Disney+ Hotstar subscribers declined this quarter as we adjusted our product from one centred around IPL to one more balanced with other sports and entertainment offerings. This business, with its significantly lower Arpu compared to core Disney+, is not a material component of our overall D2C financial results,” he said.

The firm is determining the right strategies for pricing, marketing, content and specific international market investments, Iger pointed out. “However, since my return, we’ve reset the whole business around economics designed to deliver significant, sustained profitability. We’re prioritizing the strength of our brands and franchises. We’re rationalizing the volume of content we make, what we spend, and what markets we invest in.”

To enhance monetization, the company has raised prices in nearly 50 countries worldwide and is looking at more streaming price increases.

“We have the technical capability to monitor password sharing…and it’s significant. In calendar 2024, we’re going to get at this issue. We certainly have established this as a real priority and think that there’s an opportunity here to help us grow our business,” Iger said.

Further, the company, which has already hinted at selling linear assets, saw operating income decline at linear networks versus the prior year by $580 million, driven by declines at both domestic and international channels.

“While linear remains highly profitable for Disney today, the trends being fueled by cord-cutting are unmistakable. And we are thinking expansively and considering a variety of strategic options,” Iger said during the earnings call.


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