When Disney+ Hotstar and JioCinema come together they can crush Netflix and Prime, with their control over 31% of the streaming user base, against Netflix and Prime Video’s 8% each (Comscore data). But will Jio also retire the Disney+ Hotstar brand along the way, as analysts have been saying? Does killing the stronger brand make business sense? Experts weigh in.
Make JioCinema the “mother app”
Karan Taurani, senior VP, Elara Capital
If Jio and Disney opt for dual branding, it could lead to customer confusion. When Disney acquired Hotstar, they already had an established platform, which was seeing continuous growth due to a large control over the sports content; in this case, Jio wants to enter the market under the Jio brand, to become the potential market leader via bundling and their last-mile support (fibre and mobile). Thus, from a branding perspective, JioCinema seems to be the better choice. IPL accounts for almost 50% of India’s total sports viewership, and it is now under Jio Cinema, along with BCCI content. The only significant sports content left with Star is the ICC tournaments, along with some international rights shared with Sony and Star. Currently, Jio Cinema controls about 60% of India’s sports content.
JioCinema also has a substantial customer base, with monthly active users (MAUs) ranging between 350 and 400 million. It has broader access to TV content and the entire Jio ecosystem. In contrast, Disney+ Hotstar (India) has been consistently losing subscribers. They had 60 million subscribers when IPL was on Star Network; the subscriber base has since dropped around 40% towards 36 mn paid subs currently
Hotstar has also lost key HBO content to JioCinema; It is relying solely on Star’s catch-up TV content, while JioCinema has access to content from other players through the Jio TV set-top box and fibre offerings. Thus, integrating with the Jio ecosystem reduces customer confusion and strengthens JioCinema as the “mother app.” JioCinema likely offers 2 to 2.5 times more content across genres compared to Hotstar — this makes JioCinema strong enough to compete with platforms like YouTube.
India’s digital video advertising market is estimated at $1.5-$2 billion, with YouTube controlling $1.1-$1.2 billion, roughly 50-60% of the market. Post the Disney merger, JioCinema will control almost 85-90% of the sports content in the country. They will also have a wide variety of movies — from Indian films to global blockbusters, including Marvel titles and Star/Colors network offerings. This extensive content library can be effectively leveraged to attract and retain customers.
The key challenge, however, is user experience. Ji Cinema must invest aggressively in technology to match the user experience provided by global giants like Prime, Disney+ Hotstar, and Netflix. If they succeed in replicating this, JioCinema has the potential to not only match YouTube’s revenue figures but possibly surpass it in the medium to long term.
Let the audience be king
Pinaki Dasgupta, professor of marketing, IMI, New Delhi
Disney + Hotstar has been able to create a niche for itself in the OTT space, and I believe its audience group is completely different from that of, say, a Netflix or a Prime. It is a well-defined and engaged audience. If they drop that brand after the merger, it will be complete injustice to that audience segment. And the classic rules of marketing say, you don’t mess with your core audience.
The OTT space is currently not only crowded but noisy too. Zee Entertainment and Culver Max Entertainment , which operates as Sony Pictures Networks and its affiliate Bangla Entertainment, have just reached a comprehensive non-cash agreement to resolve their disputes over the failed merger deal. The Disney + Hotstar and the Jio merger, which is on the anvil, could prove to be the proverbial wind beneath the OTT segment’s wings. Once that happens, the behemoth that will be formed will need to figure out what it really wants out of its OTT play.
The whole OTT space in India is a work in progress. Netflix is fighting its own battle — trying to choose among the titles produced by itself versus how soon it can drop the new Bollywood releases versus showcasing the old library at its disposal. Prime is ferociously producing a lot of its own shows and toying with the dilemma of how soon it can drop the new Bollywood release versus some very good cinema which is on rent. Apart from the likes of Zee5, SonyLiv, JioCinema, there are many more that are trying to find their feet.
Disney+ Hotstar was the prodigal son that had carved a niche for itself with some really good content and was not a crazy hanger-on for the new Bollywood release. The content on the platform from the library of Disney, Hotstar and HBO (which was removed from Disney + Hotstar in 2023) were finely curated for a very wide audience.
Jio is still trying to find its mojo. It has IPL streaming rights but the presentation is patchy — at least it was in the beginning. It got the rights to the Paris Olympics but here again the presenters left a lot to be desired. The thing is, an OTT platform works on content, content and content alone. And the content has to be relevant, unusual, familiar and meaningful.
If Netflix was content “quality” and Prime was content “quantity”, then Disney + Hotstar was about content “curation” for a target group that was looking for their “dal-chawal moment” — with timeless shows. Modern Family and How I Met your Mother were some of the all-time classics that the audience never got tired of watching. The merger could well mean a complete change of your diet plan.
(Views expressed are the author’s own and not necessarily those of financialexpress.com)