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Disney+ Hotstar to not be deterred by loss of IPL broadcast rights

What is the video streaming service’s fallback?

Disney+ Hotstar had an eventful quarter as it added nearly 26 lakh subscribers whereas Disney+ added nearly 1.1 crore subscribers from Q4 2021, according to the company’s earnings report for Q1 2022.

Why it matters: The growth is notable as Netflix recently announced that it lost nearly 2,00,000 subscribers for the first time in a decade. It could also mean that Disney+ is bucking the trend of an impending slowdown in the streaming sector as people return to offices and theatres open up.

What is the role of sports: Disney’s CEO Bob Chapek informed analysts that sports is a key differentiator based on which they enter different territories with their service. Chapek added that a big percentage of consumers in Latin America subscribe to Disney+ because of sports.

“It’s a very important strategic offering because the fandom and the passion is so deep,” Chapek said.

How crucial is IPL in India: Chapek said that the company will try to extend its IPL rights but has plans in place if it were to lose the IPL broadcast rights. He assured investors that the company will still be able to achieve its target of 230 to 260 million subscribers by 2024.

What if Hotstar loses IPL rights: Chapek said that IPL is “an important part of the Disney+ Hotstar content offering” but it’s “one component of a broader portfolio of entertainment and sports”.

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  • He highlighted that the company has a library of Disney, Pixar, Marvel, Star Wars, and Nat Geo besides its collection of local content.
  • Chapek said that the company adds over 18,000 hours of original programming every year.
  • He also said that he was banking on the company’s local content slate to mitigate the impact of the possible loss of IPL broadcast rights.

Overview of Disney’s financial results: Disney’s OTT segment saw a loss of $127 million year-over-year. The company pointed out that the loss was driven by higher programming, technology, and marketing costs.

  • The company had a total of nearly 130 million Disney+ subscribers globally. A breakdown of this growth reveals—
    • 4.1 million Disney+ subscribers came from the US and Canada.
    • 5.1 million subscribers came from international markets excluding Disney+ Hotstar. This includes markets in the Asia-Pacific and Europe.
  • The revenue for the quarter increased 34 percent to $4.7 billion whereas the average monthly revenue per paid subscriber for Disney+ Hotstar has increased from $0.98 to $1.03.
  • The company credited launches in new territories with higher average prices for the increase.
  • Disney clarified that the increases in costs and subscribers reflected growth in existing markets and expansion to new markets only to an extent.

What did Netflix say in its quarterly result: The company announced several measures to augment its revenue. Netflix wants to ramp up efforts towards monetising sharing of accounts as it estimates that 100 million households are relying on other accounts, the company revealed in its earnings report.

  • Netflix’s Co-CEO Reed Hastings also said that the company was looking to increase its price spread by exploring advertising on low-end tiers.
  • Netflix explained that the recent price cut in India was a bet in terms of long-term revenue maximisation.
  • The next few months will be interesting as its competitors continue to gain ground on the company which is on track to lose more subscribers.

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Written By

I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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