Batting on a sticky wicket

Can Disney+ Hotstar maintain its lead without IPL & HBO?

Disney+ Hotstar lost the IPL digital streaming rights last year for the 2023-27 period to Viacom18,
Disney+ Hotstar lost the IPL digital streaming rights last year for the 2023-27 period to Viacom18,

Streaming platform Disney+ Hotstar announced on Twitter that it will not feature HBO content from March 31. This means that award-winning shows such as The Game Of Thrones, Succession and Westworld will no longer be available on the platform. Disney+ Hotstar lost the IPL digital streaming rights last year for the 2023-27 period to Viacom18, and saw its subscriber base fall from 61.3 million in September 2022 to 57.5 million in December 2022. Now its woes seem to be mounting with the loss of HBO content and with Formula One also no longer streaming. In fact, last year, Disney reduced the subscriber target for Disney+ Hotstar to 80 million by the end of FY24 from its previous target of 100 million.

Can Disney+ Hotstar maintain its lead in the OTT market without IPL and HBO content?

Noting that the platform is still a pioneer in the competitive OTT space with a huge subscription base, Mitesh Kothari, co-founder and chief creative officer, White Rivers Media, believes that it may be too early to speculate the kind of impact the withdrawal of HBO content and IPL streaming will have. “New users are joining the OTT ecosystem each day with a vast array of preferences, and Disney+ Hotstar remains one of the dominant players. Any development on an OTT platform, whether in terms of withdrawal or inclusion, can only be assessed over time,” he says.

And the opportunity is immense. A Deloitte report projects that the over-the-top (OTT) market in India is expected to grow at a CAGR of over 20% to reach the $13 to $15 billion mark by the next decade. The SVOD (subscription video on demand) market specifically is expected to become $2.1 billion in the same period.

Viewership challenge

As per data from OTT streaming guide JustWatch released in November last year, Disney+ Hotstar is in the lead with 27% market share in the Indian SVOD space, followed by Prime Video that holds 21% market share. These are followed by Netflix at 12% and Zee5 at 10% share, respectively. Players such as Voot, SonyLIV and JioCinema account for about 17% between them.

Ormax Media estimates show Disney+ Hotstar’s most viewed international launch since 2021 has been HBO’s House Of The Dragon, which garnered a viewership of 28.2 million. The removal of this and other HBO shows like The Last of Us (7.7 million viewership) will be a loss to the platform. However, Keerat Grewal, partner, Ormax Media points out that the OTT player has a strong Marvel Studios content offering as well. “Seven of the Marvel Studios series feature in the top 20 most viewed international shows since 2021. Among these, Moon Knight (23.4 million), Hawkeye (19.3 million) and Ms Marvel (15.1 million) have been among the top five most viewed international series in India,” remarks Grewal.

It is pertinent to note that English content viewership in India is limited, and Disney+ Hotstar continues to perform well on the Hindi content front. As per Ormax Media’s report last year, the OTT player’s Hindi originals accounted for nearly 50% of the most-watched Hindi content from July to December in 2022.

IPL impact

The overall watch time of HBO content on Disney+ Hotstar was around a fifth of other Disney+ films and originals, according to Shantanu Bhattacharyya, senior VP, digital strategy planning and client success at LS Digital. Considering this, the loss of the subscriber base, who were active HBO content viewers, may be a mere 1%. He believes the removal of HBO content in fact will help the OTT platform in financial restructuring. As per media reports, HBO’s asking
price was $10 million a year for a five-year deal.

The real impact on subscription however will come from the loss of digital IPL streaming, Bhattacharyya asserts. “The IPL helped the platform achieve its pole position in paid subscriptions in India. With IPL 2022, Disney+ Hotstar saw an increment of around 17% in paid subscribers. A 15% drop in subscribers is expected by the end of this fiscal,” he explains. The loss of IPL streaming is also expected to affect the platform’s ad revenues, considering Disney+ Hotstar garnered `1,500 crore in ad revenues from it last year.

Despite the mounting challenges, there is some respite, considering that catch up TV content drives a large chunk of broadcaster OTT content and Disney Star is still the market leader for TV content, observes Karan Taurani, senior VP at Elara Capital. He expects the platform to aggressively invest in original content to ensure subscriber retention and minimise the negative impact from the loss of IPL digital rights.

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First published on: 27-03-2023 at 17:45 IST