The average monthly revenue per paid subscriber for Disney+Hotstar is significantly lower than that for Disney+.
Subscriber additions for Disney+Hotstar continue to maintain a “strong growth trend”. The paid users of the service make up nearly 30% of the global subscriber base of Disney+, The Walt Disney Company said on Thursday.
Disney+ had 94.9 million subscribers as of January 2, 2021. The share of subscribers for Disney+Hotstar that operates in India and Indonesia is led by India.
Disney+Hotstar, whose bouquet of premium sports content is a big draw for many consumers, did see a “bump up” in the number of subscribers during the commencement of the IPL (Indian Premier League) season, said senior executive vice president and chief financial officer Christine McCarthy, The Walt Disney Company while speaking at the firm’s Q1FY21 earnings call. Responding to whether there is a risk of churn when the IPL comes to an end, McCarthy said that although cricket is a very important part of the platform’s programming strategy, the OTT service also offers a slew of other local content that consumers like to view. “…we’ve also made it economical for a consumer to sign up for a one-year subscription versus going month-to-month. So those are some of the things that we’re looking at and utilising to mitigate the churn that one could expect from IPL,” McCarthy said.
The average monthly revenue per paid subscriber for Disney+Hotstar is significantly lower than that for Disney+. The company said that due to the launch of Disney+Hotstar, the average monthly revenue per paid subscriber for Disney+ decreased from $5.56 to $4.03.
In India, Disney+Hotstar competes with global players Netflix, Amazon Prime Video and a clutch of homegrown services including Zee5, AltBalaji and Voot Select. Disney had earlier said that Disney+Hotstar will be enhanced with the addition of local programming and the strategy will be to grow with premium content for everyone. “We believe that content is the single biggest driver to not only acquiring subs, but retaining them,” McCarthy said.
Analysts at Media Partners Asia estimate Indian OTT content investments to have reached $700 million in 2020. With budgets for originals and local acquisitions trending upwards, OTT content costs are projected to grow at a CAGR of 18% between 2020-25 to reach $1.6 billion.
Talking about the overall consumer engagement on Disney+, McCarthy said: “Any time we put a new piece of content, the engagement for people who know what the schedule of releases is, it’s quite encouraging. So we believe we’re going to reach that cadence of getting content on the service every week within the next few years”. The company has set a daunting target for over 100 new titles per year.
Separately, filings sourced from business intelligence platform Tofler showed Hotstar’s revenue from operations increased by 43.16% y-o-y to Rs 1,593.02 crore in FY20. Total losses declined to Rs 361.89 crore during the year from Rs 554.38 crore in FY19.