Hotstar fetches over 4 million new subscribers for Disney+

Disney+, the video streaming service owned by Walt Disney added around eight million new subscribers globally in the January to March quarter, with over half of those coming from Disney+ Hotstar, that the service is known as in India and other Asian countries such as Malaysia, Thailand and Indonesia.  

The platform benefited from the cricket Indian Premier League tournament that started on March 26, the company said in an earnings call on Wednesday. Disney+ ended the quarter with 138 million global paid Disney+ subscribers with Hotstar making for around 50 million subscribers alone. Additionally, the company has earmarked $10.6 billion for sports in fiscal 2022, its top executive said. 

Disney follows an October to September fiscal year with the January to March quarter making for the second quarter for the company.

The four million net additions for Hotstar are a jump from the 2.6 million paid subscribers it had acquired over the December quarter when it had clocked in 45.9 million subscribers worldwide, a marginal drop from the 46 million subscribers it was estimated to have at the end of the previous quarter.

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“We ended the quarter with nearly 138 million global paid Disney+ subscribers, reflecting close to 8 million net additions from Q1. A little over half of those net adds were from Disney+ Hotstar, which benefited from the start of the new IPL season towards the end of the second quarter,” Christine McCarthy, senior executive vice-president and chief financial officer said in an earnings call.

McCarthy added that the company expects fiscal year 2022 cash content spend to total $32 billion globally, with one-third of it going to sports.  

“(As far as) the balance of that $32 billion (goes), a meaningful amount of it will be enterprise-wide content budget that will be dedicated to investments in the general entertainment content that we can leverage across our various distribution platforms…theatrical as well as direct-to-consumer. We have about 500 shows in the pipeline for local content outside of the US or English speaking (market)…140 in south-east Asia…in India, it’s 100,” McCarthy said.

Over the past few months, Hotstar in India has been known for Ajay Devgn’s OTT debut Rudra-The Edge of Darkness, historical drama The Empire starring Shabana Azmi and Kunal Kapoor, crime drama Aarya, among others. The average monthly revenue per paid subscriber for Disney+ Hotstar increased from $0.49 to $0.76 due to launches in new territories with higher average prices and higher per-subscriber advertising revenue, partially offset by a higher mix of wholesale subscribers, Disney said in a statement.

Disney CEO Bob Chapek also mentioned that the company’s ad-supported subscription offering would launch in the US by the end of 2022 and internationally by 2023. Expanding Disney+ access through multiple price points is “a win for consumers and advertisers,” he said.

News of the company’s ad-supported model comes close in the heels of rival streaming platform Netflix also admitting to looking at advertising to broaden its audience in an earnings call, last month. Mint had earlier reported that video streaming platforms in India with paid subscribers may introduce advertising-led plans to attract more users, while Amazon Prime Video launched its free service miniTV last May within the Android app featuring a library of web series and comedy sketches, others are offering older films or a few episodes of popular shows for free, or tying up for branded content that isn’t behind paywall.  

Media experts said a freemium strategy helps provide an incentive to users sitting on the fence to subscribe, and is also a big monetisation opportunity for the platform with the digital advertising market expected to grow 35-40% per year.

“The Disney+ ad tier is going to give us the ability to reach an even more broad audience as we expand Disney+ across multiple price points. And using some of our other services, we can see the additive nature of an ad-driven service that enables us to keep the price lower. Of course, that’s made up for by the additional revenue that we would get per user on the advertising spending,” Chapek said during the earnings call without disclosing possible price points for new tiers.