In the quarter ending in June, Disney revealed that Disney+ Hotstar experienced a decline in its customer base, losing approximately 12.5 million subscribers, which accounts for nearly a fourth of its total subscribers. This ongoing setback is primarily attributed to the absence of cricket content, a significant factor for the India-focused streaming platform.
This marks the third consecutive quarter in which Disney has witnessed a decline in its subscriber numbers. As of June, Hotstar’s subscriber count stood at 40.4 million, showing a decrease of about 21 million subscribers since October 2022. This decline in subscribers coincides with reports suggesting that Disney is considering options like a sale or a joint venture to address its broader business prospects in India.
During the earnings call, Disney CEO Bob Iger did not express a particularly optimistic perspective on India’s Market conditions. When questioned about how Disney+ Hotstar’s performance influenced the company’s long-term global streaming strategy and whether Disney was contemplating exiting specific markets, specific details were not provided. Iger said:
“We have been looking at multiple markets around the world with an eye toward prioritizing those that are going to help us turn this business into a profitable business. What that basically means is there are some markets that we will invest less in local programming but still maintain the service. There are some markets that we may not have a service at all. And there are others that we’ll consider, I’ll call it, high-potential markets where we’ll invest nicely for local programming, marketing and basically full-service content in those markets. Basically, what I’m saying is not all markets are created equal. And in terms of our march to profitability, one of the ways we believe we’re going to do that is by creating priorities internationally.”
Hotstar Cricket Woes and Disney’s TV Network Plans
On Wednesday, Bob Iger mentioned that Disney is currently exploring “strategic options” for its collection of TV networks. Additionally, the company implemented a price increase of over 20% for its ad-free subscriptions to Disney+ and Hulu. This marks the second instance of price adjustment within the same year.
Hotstar, previously a prized asset in Fox’s holdings, became a part of Disney following the acquisition. Over the past decade, Hotstar garnered a substantial customer base, primarily attributed to its live streaming of cricket matches, particularly the local Indian Premier League (IPL) tournament.
However, this scenario changed when Disney lost the bidding war for digital rights to the last season of IPL to Viacom18, a company supported by Mukesh Ambani’s Reliance Industries. To attract customers aggressively, JioCinema, backed by Reliance Industries, streamed this year’s IPL for free in India.
Essentially, this development enabled the country’s largest mobile telecom operator (supported by one of the world’s wealthiest individuals) to enter a market previously dominated by Disney. Disney’s defence of its traditional linear business model through securing IPL rights became less relevant once Reliance introduced its complimentary IPL mobile product. As demonstrated by local telecom operators like Vodafone in the past, it’s challenging to compete with a local powerhouse determined to disrupt the market with budget-friendly or free offerings,” outlined the boutique research firm MoffettNathanson in a report published last month.
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