A streaming service called Hotstar serves viewers in Southeast Asia and India. As part of the business’s entry into emerging countries, Disney bought it. Disney’s strategy to broaden its streaming offerings and establish a presence in India, one of the world’s fastest-growing streaming markets, has relied heavily on Hotstar. The website’s live streaming of cricket matches, especially the hugely renowned Indian Premier League (IPL) competition, helped it establish notoriety in the beginning. Although the platform provides a variety of material, such as movies, TV shows, and original programming, Hotstar’s popularity goes beyond sports.
Credits: OTT asaran
Hotstar has recently experienced difficulties despite its success, including a drop in subscribers and a decrease in revenue per subscriber. The termination of Hotstar’s licencing relationship with HBO, the loss of the IPL digital rights to Viacom18, and the cessation of several distribution agreements with telecom companies have all contributed to the fall in subscribers. According to industry observers, this trend may continue, and by the end of the year, there might be a loss of 7 million more customers.
In India and Southeast Asia, Hotstar is a key player in the streaming industry. Disney’s growth into these areas depends on its success, and in order to keep its position as the region’s top streaming service, the firm will need to fix the platform’s problems.
One of the biggest entertainment giants in the world, Disney, reported a 2% drop in subscribers overall for the first quarter of 2023. Its Hotstar streaming service, which lost 4.6 million users during the quarter ended in March, is mostly to blame for this contraction. With a total loss of 8.4 million customers since October 2022, this is the second consecutive quarter that Hotstar’s user base has decreased. Hotstar still has 53 million users, with India being its biggest market, despite this setback.
Hotstar’s declining subscriber count isn’t Disney’s only problem right now. The number of people who continue their streaming service subscriptions is also costing the business less money. In the March quarter, Hotstar’s average revenue per subscriber decreased from 74 cents to 59 cents. HBO swiftly removed its complete library off the Indian platform after Hotstar recently ended its licensing arrangement with the entertainment giant, and Viacom18 acquired the rights to HBO and additional Warner Bros. material.
The IPL Challenge:
Disney made a critical deal with Hotstar since it serves viewers in Southeast Asia and India. Customers were drawn to the platform because it offered live streaming of cricket games, notably the regional Indian Premier League (IPL) competition. However, Viacom18, a business supported by Mukesh Ambani’s Reliance Industries and worth billions of dollars, outbid Disney for the internet rights to the IPL for this season. JioCinema is offering free IPL streaming in India this year in an aggressive effort to acquire customers.
Hotstar ending its distribution agreements with telecom companies is another factor contributing to the drop in subscribers. “Lower impressions were attributable to decreases in average viewership at our sports and non-sports channels,” Disney stated in its earnings report. As the 2023 IPL season began roughly one week later than the 2022 season, the decline at our sports channels was mostly caused by cricket programming, which was reflected in airing fewer Indian Premier League (IPL) matches in the current quarter compared to the prior-year quarter.
Analysts in the industry predict that by the end of the year, Hotstar’s subscriber loss could increase by an additional 7 million. Hotstar was a key component of Disney’s strategy to increase the reach of its streaming services in developing nations, therefore this could be to the company’s detriment.
In conclusion, Disney has suffered a serious setback as a result of the fall in Hotstar subscribers, especially since the business was counting on the Indian market to drive its expansion in emerging economies. The termination of Hotstar’s licensing relationship with HBO, the loss of the IPL digital rights to Viacom18, and the cessation of several distribution agreements with telecom companies have all contributed to the fall in subscribers. According to industry observers, this trend may continue, and by the end of the year, 7 million more subscribers could be lost. What Disney will do to buck this trend and reclaim its position in the Indian market remains to be seen.