Hotstar, (Disney) Witnesses 12.5 Million Subscriber Decrease in a Quarter Due to Lack of Cricket
In the quarter ending June, Disney revealed that Disney+ Hotstar experienced a decline in its customer base by almost a quarter, losing 12.5 million subscribers. This ongoing setback for the India-focused streaming service is primarily attributed to the absence of cricket content.
This marks the third consecutive quarter in which Disney has observed a decline in its subscriber numbers. By the end of June, Hotstar's subscriber count stood at 40.4 million, which is a reduction of approximately 21 million compared to October 2022. The drop in subscribers coincides with rumors suggesting that Disney is exploring options such as a sale or a potential joint venture for its broader business interests in India.
On Wednesday, Bob Iger, the head of Disney, revealed that the company is exploring "strategic options" for its TV network portfolio. Additionally, the prices of the ad-free versions of Disney+ and Hulu have been raised by over 20%, marking the second price increase this year.
Hotstar, a valuable asset that became a part of Disney's holdings through its acquisition of Fox, gained a significant customer base over the past decade by offering livestreams of cricket matches, particularly the local IPL tournament.
However, this dynamic shifted when Disney was outbid for the digital rights of the IPL's last season by Viacom18, a company backed by billionaire Mukesh Ambani's Reliance Industries. To attract customers aggressively, JioCinema, operated by Reliance, streamed this year's IPL for free in India.
This move essentially allowed India's largest mobile telecom operator, supported by one of the world's wealthiest individuals, to enter a market that was once dominated by Disney. The move disrupted the market with budget-friendly or free offerings, and Disney's efforts to secure the IPL rights for its linear business became less relevant in the face of Reliance's disruptive approach.
MoffettNathanson, a boutique research house, pointed out in a recent report that defending the linear business model through securing IPL rights made little sense for Disney once Reliance introduced its free IPL mobile product. The report highlighted that, historically, mobile operators like Vodafone have struggled to compete against local champions determined to disrupt the market with low-cost or complimentary offerings.