Disney lowers subscriber target after losing IPL streaming rights
Media giant Walt Disney has revised its latest subscription guidelines for its Disney+ Hotstar streaming service after losing Indian Premier League (IPL) streaming rights to Reliance-backed Viacom18.
The company revised its subscriber count to 80 million by the end of fiscal 2024, from a projected 100 million.
Meanwhile, the streaming service added 8.3 million subscribers in the third quarter that ended July 2, reaching 58.4 million subscribers in India and Southeast Asia.
Disney+ had 44.9 million paying users during the same period last year.
The streaming giant also edged out Netflix with 221 million subscribers at the end of the quarter and announced that it would launch a Disney+ option with advertising in December.
Combined with Hulu and ESPN+, Disney said it had 221.1 million streaming subscribers at the end of the June quarter. Netflix said it has 220.7 million streaming subscribers.
“The downgrade will impact the overall subscriber outlook for Disney+,” said Christine McCarthy, Senior Executive Vice President and Chief Financial Officer of Walt Disney, during Thursday’s earnings call. Indeed, Hotstar is a key contributor to Disney+’s user base, accounting for 38.4% of its total subscribers of 152.1 million during the April-June period. The company follows an accounting year from October to September.
McCarthy said the overall subscriber forecast for Disney+ was lowered to 215-245 million worldwide by the end of fiscal year 2024, from the previous estimate of 230-260 million for the same period. .
“We recently made the disciplined decision not to pursue IPL digital rights and we will assess those rights with the same discipline,” McCarthy said.
“Excluding the impact of any significant future macro headwinds, our core+ subscriber target range is 135 million to 165 million, broadly in line with guidance provided previously,” she said.
McCarthy previously said the company would focus its attention on increasing its entertainment content across its platforms, lining up around 100 shows in India. Even as the entertainment conglomerate lost the streaming rights, Disney-Star won the five-year TV rights for IPL at Rs 23,575 crore.
“One-third of the $32 billion in content spend for fiscal year 2022 will be on sports. Of the balance, a significant amount will be on investments in general entertainment that we can leverage across all of our distribution platforms. We “We have about 500 shows in the local content pipeline outside of the U.S. Of that, 140 are in Southeast Asia. In EMEA it’s 150, and in India it’s 100 shows,” a- she declared.
Karan Taurani, senior vice president of research at Elara Capital, said the revised subscriber guidance for Hotstar was in line with expectations as the video streaming platform won major looks with the digital rights to the IPL.
Walt Disney said Thursday that talk shows such as Koffee with Karan are one of its most popular shows and that it will continue to invest in entertainment content, including movies and web originals. It will also rely on international content, such as that of the Marvel universe, dubbed into several languages, to attract audiences in India.
“We look forward to several upcoming catalysts for Disney+, including reaching a steady state of original content releases on tent poles, delivering high-end general entertainment and international local originals, and launching next in our ad-supported tier,” McCarthy said.