There are just a few days left when the deal between OTT giant Disney+ Hotstar and Warner Bros Discovery will come to an end. Disney+ Hotstar has reportedly decided against renewing the much talked about licensing agreement. As a result, 144 HBO originals including premium HBO shows like ‘The Last of Us’, ‘Game of Thrones’ and ‘Succession’, etc. will cease to stream on Disney+ Hotstar starting from 31st March.
Apparently, HBO wanted a whopping $10 million (equivalent to around INR 80 crores) from Disney+ Hotstar for the next five-year content deal. As per a report, less than 4.8 lakh Disney+ Hotstar subscribers were watching HBO content on the OTT platform.
Even if it is assumed that if every one of these 4.8 lakh subscribers paid for their top plan @ Rs.1499/- annually, it fetches a maximum revenue figure of around Rs.72 crores, which still falls short of HBO’s asking price of Rs.80 crores.
As per this calculation, HBO content needs to be watched by more than 5.3 lakh Disney+ Hotstar (@ Rs.1499/- annually) subscribers to hit the 80-crore mark and achiev near break-even revenue. Ostensibly, that’s not the case here. On the contrary, it would have been a loss-making proposition for Disney+ Hotstar if it would have gone ahead with the deal.
Now, in case you’re wondering which Indian OTT platform currently has the potential to match HBO’s 80-crore asking price mark, then we’re rowing the same boat.
This makes one think whether HBO is overvaluing its content from the point of view of the Indian OTT industry. We think HBO is still thinking in terms of 2020-21 pandemic times, but it now needs to alter its strategy for the Indian OTT market because the situation has changed.
As of now, it looks like no Indian OTT platform including Disney+ Hotstar, Amazon Prime Video, Netflix, and even Jio would make money by the 80-crore deal being offered by HBO. Considering their deep pockets, even if an Indian streaming company invests for HBO content for such a massive asking price, then it might do so as a long-term investment for making a dent in the Indian OTT industry, not for short-term gains or medium-term profits.
So, yes HBO may be overvaluing its content with respect to the Indian streaming space, but it remains to be seen whether an Indian OTT platform would still be ready to pay the 80-crore price for the same or if the deal price goes down.