In an intriguing, and not to say, juicy bit of information coming in from anonymous sources at the prestigious business publication, Wall Street Journal, The Walt Disney Co. is exploring ways to make Disney Plus Hotstar, its streaming service in India, profitable. As per WSJ, the company “has spoken with at least one bank to discuss options on how to make its India business grow, while also seeing the cost burden shared. These options could include a sale of the business or a joint venture”. That Disney is open to even a sale or joint venture points to the fact that it will do anything to help it turn around Disney Plus Hotstar to profitability. The news was first reported by international entertainment publication, Variety.
The Walt Disney Co., parent company of Disney+ Hotstar, seems to have finally woken up to the threat posed by rival OTT players in the burgeoning Indian streaming market. Interestingly, the threat it needs to address does not come from its fellow foreign streamers and international rivals, Prime Video and Netflix. It comes from local, homegrown streaming platforms – the imminent SonyLIV + ZEE5 combine, and most specifically, fast-rising streaming platform, Jio Cinema.
In recent times, Jio Cinema has managed to grab Disney Plus Hotstar’s most alluring properties – the IPL and HBO content – right from under Disney’s nose. Jio Cinema has also resorted to populist measures to draw in subscribers — such as allowing its users to stream the IPL absolutely free of cost. Jio Cinema is also streaming its entire Indian content library free of cost to the user. The streaming platform is owned by the deep-pocketed Reliance, owned by India’s richest businessman, Mukesh Ambani.
The free streaming strategy has been successful to an extent. The IPL hit record viewing numbers on Jio Cinema this year, not to say, significantly increased advertising revenue — a total inflow of a whopping ₹10,120 crore ad revenue, out of which Jio Cinema’s share works out to around Rs 2,300- 2,500 crore. As per sources, the ad spend on the digital broadcast of IPL was more than double that of last year. Streaming IPL for free made all the difference, say sources.
Reports suggest that the cumulative effect of all of the above will soon be apparent. Disney Plus Hotstar is expected to report a loss of close to 10 million subscribers in its third quarter results, slated for August 2023. Even with the number of subscribers it presently has — a market-leading 50M+ subscribers — Disney’s earning per user is very low – a measly $0.59 per month per subscriber.
The future looks quite bleak for Disney in India. With all the consolidation happening at various levels in the Indian streaming space, and Jio Cinema getting increasingly aggressive, Disney will have to pull up its socks, and do it fast. Let’s see what the future holds for Disney’s streaming service in India.
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