Multimedia giant Disney announced that its OTT platform Disney+ gained 8 million paid subscribers in the second quarter, largely owing to its streaming of the Indian Premier League (IPL). The announcement came during the company’s quarterly financial meeting on Wednesday.
“A little over half of those additions were from Disney+ Hotstar, which benefited from the start of the new IPL season, towards the end of the second quarter,” said Christine McCarthy, CFO and Senior Executive Vice President, during the investor’s call.
The organisation has thus ended its second quarter with around 138 million paid subscribers, as per a letter to the shareholders.
Disney+ Hotstar and IPL
The ongoing 15th season of the IPL, which is expected to end in May, has proved to be the main driving force for the streaming platform’s growth in India. A significant chunk of Hotstar’s subscription base has been a result of its coverage of sports, cricket in particular.
During the Goldman Sachs Communacopia conference in 2021, Disney’s CEO Bob Chapek had said that IPL could help the platform reclaim its lost subscriber base in India.
It is to be noted that both domestic and international cricket has been streaming on Hotstar since its launch in 2015. In the first year the streamer notched over 345 million views through the 2015 Cricket World Cup, and over 200 million views during that year’s IPL season. With that, Hotstar became the most-used OTT platform in India.
Disney decided to bank on this growth in 2020, after it acquired 21st Century Fox, the parent company of Star India, in 2019.
Its Disney+ platform was thus integrated with Hotstar to launch Disney+ Hotstar in 2020.
In March 2021, the Federation of Indian Chambers and Commerce Industry (FICCI) reported that subscriptions to digital media witnessed a growth of 49% in 2020, after the online streaming of sports went behind a paywall.
Aside from sports, the rebranding in 2020 also allowed Disney to tap into Hotstar’s content reserves, such as regional soap operas. Imported content was also added to the platform, primarily from Disney’s original libraries, including Pixar films, Lucasfilm content, and Marvel films and series.
With a rise in demand for local, regional content, Disney’s leadership revealed on Wednesday that it will spend $32 billion on content, and has 500 shows in its pipeline, outside of the US. Of these, 140 shows are from the Asia Pacific region, including South-East Asia, 150 from Europe, West Asia, and Africa, and 200 from Latin America. India has 100 shows under development, as a part of the slate.
Disney vs Netflix in India
Even as Disney+ has gained subscribers, the fortunes of its rival Netflix has seen a downturn in recent times.
In January, Netflix leadership admitted that the streaming platform’s slow growth in India was “frustrating.” Product and Operations Officer Greg Peters had said this was the case despite the earlier decision to slash prices in the country in order to achieve long-term maximisation of the subscriber base.
As per Netflix’s latest financial earnings report, the platform has lost 200,000 subscribers, globally, in the first quarter of 2022. The executives went on to admit that the company is not growing as fast as they would like. Netflix has also forecast an additional loss of 2 million subscribers in the upcoming quarter.
Meanwhile, Disney is now eyeing a target of over 230 million paid global users by 2024.
Though Netflix currently has a global subscriber base of 222 million members, Disney’s fast growth could prove worrisome for its rival. The total subscriber base for Disney’s direct-to-consumer (DTC) offerings now stands at a little over 205 million paid members, including Hulu’s 45.6 million subscribers and 22.3 million paid users for ESPN Plus.
In April, Netflix had also revealed that it is considering introducing low-priced, ad-supported plans in the next couple of years.
At the beginning of the call on Wednesday, Chapek announced Disney’s plans to introduce an ad-supported model for Disney+ as well. The lower priced ad-supported plan will be available in the US first, by the end of 2022. It will then be expanded to New Mexico, Africa, West Asia, and other countries by 2023.
Details around the price-point of this new plan are still under wraps. However, when asked whether or not the company will need to enhance its acquisitions before the plan is rolled out, Chapek said, “We are in a really good shape, in terms of being able to meet our timing with our Disney+ ad tier. That’s largely because we are already doing it. The combination of our ESPN Plus streaming, and our experience in Hulu, we think that our current advertising capabilities substantially prepare us to already bring this tier into operation.”
In the past, Netflix had said it planned to stay away from acquiring broadcasting rights for sports. Given the Disney+ growth thanks to the IPL, whether Netflix will change its stance on this remains to be seen.
Disney Films in China
During the call, Chapek also addressed the inability of Disney to secure releases for its films, particularly its Marvel movies, in China of late.
Chapek described the situation in China as “complicated” but noted that the difficulties faced by the company in penetrating the Chinese market haven’t impeded the performances of the films at the global box office. “It doesn’t really preclude our success, given the relatively lower take rate that we get in the box office in China compared to the rest of the world,” he said.
The CEO also cited the example of Doctor Strange in the Multiverse of Madness, which recently released worldwide, and crossed $500 million in global collections. The film incidentally witnessed the fourth best opening for a Hollywood movie in India, after Avengers: Endgame, Spider-Man: No Way Home, and Avengers: Infinity War.