Disney+ Hotstar adds 3 million subscribers in Q4, expects IPL loss to hit

The Walt Disney Co saw its video streaming platform Disney+ add 12 million subscribers globally in the July to September quarter, with Hotstar bringing in a little less than 3 million subscribers. This is a dip from the 8 million subscribers Hotstar had added in the April to June quarter. The service is known as Disney+ Hotstar in India and other Asian countries such as Malaysia, Thailand and Indonesia. Globally, Disney+ has breached the 164 million subscriber mark. The company follows an October to September financial year.

“We expect Disney+ core subscriber growth to accelerate in the fiscal second quarter, largely driven by international markets. And at Disney+ Hotstar, we are currently expecting that subscribers will decline in Q1 due to the absence of the IPL (Indian Premier League), but we do expect to see some stabilization in Q2,” Christine McCarthy, senior executive vice-president and chief financial officer said during an earnings call. This August, Walt Disney had lowered its subscriber guidance for Hotstar to 80 million by the end of fiscal 2024 after the loss of rights to stream the Indian Premier League online. The platform had earlier projected the user base at 70-100 million. This will bring the overall subscriptions for Disney+, down to 215-245 million globally in the same period, as compared to the previous guidance of 230-260 million, the company had said.

The average monthly revenue per paid subscriber for Disney+ Hotstar decreased from $0.64 to $0.58 in the September quarter due to lower per-subscriber advertising revenue and a higher mix of wholesale subscribers, partially offset by an increase in retail pricing, Disney said in a press release.

“The sports marketplace, in particular, is delivering strong audiences across our platforms...”  McCarthy said during the earnings call.

In a recent interview with Mint, Rebecca Campbell, chairman of international content and operations at Walt Disney Co. had said the company’s strategy is to look at every sports right that’s coming up. “We decide how much we’re willing to pay for them, and we’re disciplined about that in our approach. It’s public that we decided to look for linear and digital IPL rights, and we received the linear rights. Then we got Cricket Australia rights, and a couple of weeks ago, we had ICC in Dubai, where we ended up getting both and had a partnership with Zee, where they take the linear rights, and we have digital. So when I look back over the summer, we have a great portfolio,” Campbell had said.

Bob Chapek, chief executive officer at Disney said the company’s approach going forward is going to be focused largely on profitability. “If we look at the content that’s going to actually fuel our subscriber growth and our engagement, we’re obviously managing that very carefully,” Chapek said adding that there are some cost management initiatives in progress across marketing and content spending.

“We’ve also got an opportunity to manage our profitability through that pricing power that we believe we have here. We launched these services at tremendous values to the consumer. And everything that we’ve got shows us that we still have some opportunity for continued price value exploration on all of our services. Our history shows that when we’ve taken price increases across our streaming businesses, we don’t meaningfully increase churn or cancellations,” Chapek added.