With 33% of the 103 million Disney+ subscribers originating from India, the media giant is ramping up its presence in the region, including new original Indian content — and cricket — for the branded Disney+ Hotstar platform.
The platform July 27 disclosed 16 new shows, including four movies: Bhuj: The Pride of India, comedy Hungama 2, thriller Collar Bomb and Bhoot Police. The service will also live-stream cricket tournaments Vivo IPL 2021 and the ICC Men’s T20 World Cup.
“The content slate demonstrates our relentless pursuit of bringing original and locally relevant stories to our consumers,” Sunil Rayan, president of Disney+ Hotstar, said in a statement.
Disney acquired Hotstar in its $71.3 billion acquisition of select 21st Century Fox assets in 2019, including 20th Century Fox Studio. Disney operates Disney+, Disney+ Hotstar, Star+, Hulu, Hulu + Live TV and ESPN+.
The platform, beginning Sept. 1, will bow new annual subscription plans for a mobile-only single device priced at INR499 ($6.69); two devices at INR899 ($12.06); and INR1499 ($20.12) for four devices. The single mobile-only plan currently costs INR399 ($5.36).
“With the newly introduced subscription plans, we want to make our content more accessible to our viewers by offering best-in-class entertainment while giving them an opportunity to choose the plan that best suits their needs,” Rayan said.
When Disney announced that its branded SVOD platform Disney+ had topped 103 million subscribers through the second fiscal quarter ended April 3, the tally fell below company and Wall Street projections of 108 million to 110 million, respectively.
Speaking on the May 13 fiscal call, CFO Christine McCarthy put a positive spin on the setback, saying Disney+ added subs at a faster pace in the last month of the second quarter than it did in the first two months.
“And that was despite no major market launches, a price increase in [Europe and the Middle East] and a domestic price increase towards the end of the quarter,” McCarthy said.
She said Disney’s combined direct-to-consumer portfolio of Disney+, Hulu, Hulu with Live TV, ESPN+, Disney+ Hotstar and pending general entertainment site Star+, remains on track to achieve company guidance of 230 million to 260 million subscribers by the end of fiscal 2024.
That said, Disney is facing increased OTT headwinds going forward, including the fact that its market-leading online TV service, Hulu with Live TV, lost 200,000 subs in the quarter — a decline McCarthy attributed to seasonality of content and a $10 monthly price hike.
While Disney+ has added 30 million subs in the first half of the fiscal year, sub growth is expected to cool in the second half, due in part to ongoing COVID-19 issues in India — which accounts for a third of all Disney+ subscribers. The platform has exclusive streaming rights to Indian Premier League cricket, a sport now sidelined in the world’s second most-populous country due to the pandemic.
McCarthy said about half of the 60 IPL matches that were expected to be played this season have already taken place. The remaining 30 matches on schedule have been canceled, but negotiations are underway to relocate the fields of play outside India.
“If they were able to successfully relocate the tournament, we would hopefully see an impact, especially on advertising,” McCarthy said. “It would be better than if there were no rescheduled matches. So let’s hope they are able to relocate [the tournament].”
In addition, Disney pushed back to Aug. 31 the launch of the Star+ Latin America launch. At the same time, rollouts of Disney+ in Malaysia and Thailand remain on track for June 1 and June 30, respectively. The company expects the pending launch of “Loki” on June 9, starring Tom Hiddleston, to be a strong streaming driver.
“We remain very optimistic about our [streaming] future,” McCarthy said.
With China effectively shutting the door to U.S. streaming services looking to launch operations in the erstwhile communist country, companies such as Netflix, Amazon and Disney are aggressively targeting India to jumpstart subscriber growth.
With 1.4 billion people, including 1.1 billion on portable media devices such as smartphones, India is fertile ground for SVOD platforms looking for growth to justify multi-billion dollar infrastructure/content investments and the future of their movie/TV program distribution.
In 2020, there were about 60 platforms operating in India, with YouTube, Disney+Hotstar, Netflix, Amazon Prime Video and Facebook representing 85% market share, according to Media Partners Asia. The country’s OTT video market is projected to grow 26% annually, reaching $4.5 billion in revenue by 2025.
“Subscription based online video services benefited significantly in 2020 as the country went into the lockdown,” MPA executive Mihir Shah said in a statement.
Assisting sub growth is a massive market of affordable smartphones, inexpensive data plans and limited government regulation on foreign content streaming within its borders. The latter could be changing as the government’s ministry of information and broadcasting recently granted itself for the first time jurisdiction over streaming video content.
The Indian SVOD market will remain competitive as Disney+Hotstar continues to scale its business, while Netflix and Prime Video deepen partnerships with mobile and fixed broadband operators, according to Shah.
“Local premium content and sports rights will help broadcaster-backed platforms gain share,” Shah said. “Increased reach and engagement with rural millennials will improve monetization for short-form video platforms.
Indeed, Disney, through its acquisition of 20th Century Fox, inherited Hotstar, the Indian video service streaming movies and shows in 8 Indian languages. The upside to Disney+ has been immediate. The service topped 88 million subscribers last month, with 30% of that growth originating in India via the rebranded Hotstar service.
In 2018, Netflix co-founder/co-CEO Reed Hastings said the SVOD pioneer was shooting for 100 million Indian subs — driven in part by a mobile-only plan priced at 199 rupees ($2.72) per month. Disney+Hotstar has a similarly priced plan. Netflix reportedly spent about $400 million on Indian content in 2019 and 2020 — enjoying global success with original dramas “Sacred Games,” and “Delhi Crime,” among others.
“In the U.S., people pay $50 for mobile phone access,” Hastings told a leadership summit in New Dehli in 2019. “Pricing is very low here, and the market is very large. That’s why our 199 rupees a month pricing is very competitive.”
Amazon Jan. 13 launched a new $1.20 monthly mobile-only video streaming plan — the cheapest among U.S. services operating in India. The service is through a partnership with wireless carrier Bharti Airtel, offering prepaid subs video streaming for 89 rupees ($1.20) a month after a 30-day free trial. The offer also includes 6 gigabytes of data. Airtel has about 300 million subscribers.
Amazon reportedly is eyeing securing Indian Premier League cricket in the future, with Disney+Hotstar’s carriage rights ending in 2023.
“India is one of our fastest growing territories in the world with very high engagement rates,” Jay Marine, VP of Prime Video Worldwide, said in a statement. “Buoyed by this response, we want to double-down by offering our entertainment content to an even larger base of Indian customers.”
The morning after Walt Disney Co.’s epic Investor Day event, which saw every entertainment component of the media giant throw its support behind streaming video, i.e. Disney+, Hulu, ESPN+ and Star, Wall Street responded, sending shares to a record high.
Disney’s stock was up about 14% in Dec. 11 midmorning trading at $176 per share as of 9 a.m. PST. The company now has a market cap of almost $314 billion.
Amid the avalanche of content news on the Dec. 10 event, Disney said it would raise Disney+ subscription pricing by $1 next March, in addition to increasing European pricing by €2 to €8. The company touted more than 137 million paid subscribers through Dec. 2 via Disney+, Hulu and ESPN+.
Notably, of the 86.8 million Disney+ subscribers, 30% (26.8 million) originate in India, where Disney owns and operates Disney Hotstar and pending Star and Star+ general entertainment streaming services. Disney+ Hotstar launched April 3 in India featuring live cricket matches — a national sport — in addition to more than 17,000 hours of content in seven languages.
“We are uniquely positioned for India because of the rapidly growing middle class and their purchasing power,” Rebecca Campbell, chairman of international operations and direct-to-consumer, said on the Investor Day webcast.