CFO: Bundling, India Drove Disney+ Q1 Sub Growth

With the Disney+ streaming service adding an impressive 11.7 million subscribers in the first quarter of 2022 (ended Jan. 1) from the fourth quarter of 2021 (ended Oct. 2, 2021), CFO Christine McCarthy, speaking on the media giant’s fiscal call, said the growth came from a variety of sources.

Specifically, the platform resumed paid subscriber acquisitions in India following a slowdown in Q4 when the company had to market directly with expired subs to get them to renew — as mandated by local law. Disney + Hotstar added 2.6 million paid subscribers to finish the period with 45.9 million.

Much of that growth is driven by Hotstar’s rights to the Indian Premier League cricket competition and significant collection of local content, including the addition of 18,000 hours of original programming anually. With renewal of rights coming up, Disney remains confident it can reach from 230 million to 260 million Disney+ subs by the end of fiscal 2024.

“That local content we’re developing really will mitigate the impact on us if we were not to win the [rights] auction on IPL,” McCarthy said.

Meanwhile, Disney’s new bundling strategy combining the SVOD and ESPN+ with the Hulu online TV option generated 2 million new subscribers. The platform also added 5.1 million international subs (outside of India) driven by growth in Asia Pacific and European markets. In the quarter, Disney+ launched operations in South Korea, Taiwan and Hong Kong.

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By comparison, Netflix increased Asia Pacific paid memberships by 2.6 million with strong growth in both Japan and India. It added 1.2 million North American subs — for a total of 8.3 million additions worldwide.

“Overall, we are pleased with Disney+ subscriber growth in the quarter and are looking forward to new market launches and a strong content slate later this year,” McCarthy said. “We don’t anticipate that subscriber growth will necessarily be linear from quarter-to-quarter, and we continue to expect growth in the back half of the fiscal year to exceed growth in the first half.”

Free Ad-Supported ‘Disney+Star’ Set to Launch Feb. 23 — Outside the U.S.

Disney’s over-the-top video ecosystem is about to get larger with the scheduled Feb. 23 launch of Star within the Disney+ platform. The free AVOD tier will offer thousands of hours of movies and television programming from the company’s multiple studios, including content from the 21st Century Fox acquisition, i.e. FX, Searchlight, and 20th Century Studios, along with Star-branded exclusive originals and local programming, tailored to specific markets.

Star Plus is bowing in Europe, Canada, Australia, New Zealand and Singapore, with an additional rollout slated for Latin America in June.

Disney acquired the India-based Star brand through the Fox deal, which includes existing streaming service Hotstar. The latter includes exclusive access to Indian Premier League professional cricket, a national pastime. Hotstar is responsible for 30% of Disney+’s 94.9 million global subscribers.

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Disney+ features exclusive and catalog content from Disney, Marvel (“WandaVision”), Pixar (Soul), Star Wars (“The Mandalorian” and upcoming “The Book of Boba Fett”  and “Andor” series) and National Geographic.

“Star will be integrated into Disney+, as a distinct sixth brand tile,” CEO Bob Chapek said on the Feb. 11 fiscal webcast. “And will offer easy to use parental controls to manage access to the content.”

The platform looks to expand Disney’s OTT base of 146 million subs, which includes Disney Plus, Hulu, Hulu with Live TV and ESPN+.

“We’re less than two weeks away from launch and we’re seeing tremendous excitement amongst consumers,”Chapek said.

Analyst: India, Cricket to Drive Disney+ Sub Growth

‘The Mandalorian” has met its match: Cricket. Both entertainment choices in the U.S. and India look to drive Disney+ global subscriber growth over the next five years.

Based on September 2020 results, Digital TV Research expects five global over-the-top video platforms to have 678 million paying subscribers by 2025. Disney+ will add 112 million subs between 2020 and 2025 to take its total to 194 million — about what had through Sept. 30. Netflix will increase by 73 million subs — underscoring strong growth even for the SVOD pioneer.

Driving Disney+ sub growth will be ongoing service launches in the U.S. and India — the latter accounting for 25% of the service’s subscribers through Sept. 30. Why? The sport of professional cricket played in India.

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When Disney acquired 21st Century Fox’s assets, it assumed control of Hotstar, India’s top OTT video platform. Over the summer Disney quietly launched Disney+ Hotstar in the region, in addition to further Disney+ expansion in Europe.

Simon Murray, principal analyst at Digital TV Research, said initial sub growth at Disney+ came from the U.S., mainly due to the discounted price bundle of Disney+, ESPN+ and Hulu, and 12-month access for Verizon customers. More recently, India’s Disney+ Hotstar subs count has rocketed due to its coverage of IPL cricket.

“The U.S. and India will account for nearly half of Disney+’ subscriber base by 2025,” Murray said in a statement.

Meanwhile, Netflix’s revenue will reach $37 billion by 2025 — up by $17 billion on its 2019 total. Disney+ will generate $13 billion by 2025 — impressive since it only started service a year ago. However, this is a lot lower than Netflix due to lower ARPUs charged in developing markets.

Disney Suspends Disney+ SVOD Service Launch in India

Disney has called off the March 29 launch of its branded subscription streaming video service, Disney+, in India due to myriad issues involving the global coronavirus pandemic. The planned March 24 launch of the service in Europe remains on.

With India halting all commercial airline traffic within its borders and the suspension of the Indian Premier League (IPL) cricket tournament, Disney planned promotions around the service’s launch with its Hotstar over-the-top video platform came to a halt. Hotstar reportedly generates more than 300 million monthly views with its app and website.

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“We recently announced that Disney Plus would launch in India through the Hotstar service in conjunction with beginning of the Indian Premier League cricket season,” Uday Shankar, president of The Walt Disney Company APAC, and chairman of Star and Disney India, said in a statement. “Given the delay of the [cricket] season, we have made the decision to briefly pause the roll-out of Disney Plus and will announce a new revised premiere date for the service soon.”

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American Streaming Video Services Grapple With Global Politics

Over-the-top video is a global market with distribution as easy as creating an online network and the click of a button. While globalization is a boon for American media companies and Hollywood, there is an inconvenient flipside that comes with the territory: censorship.

The Feb. 23 broadcast of HBO’s political commentary/satire show “Last Week Tonight with John Oliver” was blocked Feb. 25 in India by Disney-owned Hotstar — a streaming service with more than 100 million monthly viewers. Disney acquired the service through it $71 billion purchase of select 21st Century Fox assets.

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The episode featured a lengthy criticism by Oliver of Indian Prime Minister Narendra Modi, a Hindu nationalist President Trump is currently meeting with in India.

Disney has big goals for Hotstar (which will soon be rebranded Disney+ Hotstar), believing the service can not only help Disney+ gain a footing in one of the world’s largest markets, but also successfully compete with Netflix.

IHS Markit estimates that Netflix has 1.2 million subscribers in India, less than half of Hotstar’s three million.

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At the same time, Disney, like Netflix and Amazon Prime Video, is discovering that carving out niche markets abroad can require agreeing to a type of government oversight unheard of in the United States.

Rather than air the Modi episode, Hotstar streamed an older episode of “Last Week.”

When Netflix found itself in the crosshairs of Saudi Arabian officals for an episode of “Patriot Act with Hasan MinHaj” critical of Prince Mohammed bin Salman Al Saud, the SVOD behemoth deleted the episode. Netflix CEO Reed Hastings later defended the decision, saying the service was in the entertainment business, not the “truth to power business.” CCO Ted Sarandos then attempted to clarify the comment, claiming Netflix was indeed in the “truth to power business,” but that sometimes that also meant agreeing to the whims of local government.

Amazon last November took down the fifth season of “Madam Secretary” in India after government objections to the political drama’s reported focus on Hindu nationalism and violence against Muslims and other minorities in India.


Report: India Considering Censorship of Netflix, Amazon, Disney Streaming Video Content

With India and its second-largest population in the world, Netflix, Amazon Prime Video and Disney have aggressively sought an over-the-top video presence in the nascent market.

The influx of foreign SVOD services has reportedly prompted some government officials to ask for increased monitoring of content on the platforms — above existing regulations.

Reuters reports that public complaints about alleged obscenity or religious slights included in foreign streamed programming has some Indian lawmakers considering content censorship.

“The self-regulation isn’t the same for all, which is raising a concern … the directions are clear, we have to see how to address the problems,” an unidentified government official told the news agency.

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Indeed, Netflix and Disney-owned Hotstar agreed to sign a self-regulation of content code, while Amazon did not.

Netflix’s popular original series “Sacred Games,” about an Indian cop rooting out corruption and violence, has reportedly faced unsuccessful legal challenges regarding alleged offensive scenes and negative comments about Hindus and a former Prime Minister.

Other complaints have revolved around the lack of mandatory anti-smoking messages on Bollywood content streaming Netflix and Prime Video.

“With [censorship] regulation, all of the [global] content will need to be sanitized for India — a huge, expensive and time-consuming exercise,” global tech analyst Prasanto Roy told Reuters.

“Sacred Games,” now in its second season, has been an international hit for Netflix, including translation in 20 languages.

“We’ve been producing shows that are incredibly relevant in their home territories, and the nice windfall is that they get viewed all over the world,” Netflix CCO Ted Sarandos said March. “It’s really accelerating the brand perception of Netflix as … someone who’s producing content that you care about in every part of the world.”


Amazon Prime Video Expands India Reach Through Dish TV

After China, India, with the second largest population in the world, has long been a coveted market by over-the-top video distributors Netflix, Amazon and Disney, among others.

Now Prime Video has partnered with Dish TV India offering the latter’s more than 17 million subscribers direct access to the streaming service’s app.

The agreement affords Indian subs streaming access to Hollywood, Bollywood and regional movies, TV shows, stand-up comedies, kids programs, including Indian and Amazon Originals.

“We, at Dish TV, always work on offering innovative entertainment solutions and superlative experience to customers and the association with Amazon Prime Video is a step in the same direction,” Anil Dua, executive director & group CEO, said in a statement. “We are delighted to have Amazon Prime Video on board with us to offer its premium content on both our Dish TV and d2h platforms with our hybrid set-top boxes that are going to be launched soon.”

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Amazon launched e-commerce operations in India in 2013 — only recently adding Prime Video and Amazon Prime Now grocery delivery service.

“With this launch, we will further extend the reach and access of Amazon Prime Video in India, giving more customers the experience of watching our wide selection of critically acclaimed and popular Amazon Originals, blockbuster movies across languages and Indian as well as international shows, on their television sets,” added Gaurav Gandhi, director and country GM, Amazon Prime Video India.

Disney, which acquired Indian streaming platform Hotstar through its 20th Century Fox merger, has almost more streaming subs in country than the United States population.

Indeed, the pending Disney+ platform will be offered through Hotstar.

“Hunger for content and ability to pay are unlocking growth for consumer payments in video,” Uday Shankar, chairman at Star and Disney India and president, The Walt Disney Co., Asia Pacific, said in a statement.


Disney Re-Names BAMTech ‘Disney Streaming Services,’ Outlines Direct-to-Consumer Strategy

Disney April 11 announced it has renamed its BAMTech backend technical company “Disney Streaming Services” as part of the 96-year-old media giant’s expansion into direct-to-consumer business.

Acquired for $2.5 billion in 2017 from Major League Baseball Advanced Media, BAMTech has powered numerous OTT services, including HBO Now,, PGA Tour Live, ESPN+, and, among others.

“This is an exciting day for the entire Disney family. It is also a challenging time,” CEO Bob Iger told attendees at the start of a three-hour investor day presentation in Los Angeles.

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The executive reiterated that Disney is entering the DTC ecosystem from a “position of strength, confidence and unbridled optimism.”

Iger said Disney is banking its future in part on digital distribution, including a new corporate segment — Direct-to-Consumer & International — featuring the pending Disney+ SVOD service, ESPN+, Hulu, Hulu with Live TV and Asia’s Hotstar ad-supported VOD platform with 300 million actively monthly users.

Kevin Mayer, chairman of DTC & International, said Disney’s foray into digital is based in part of a projected 1.1 billion high-speed Internet households worldwide by 2020 compared to 700 million in 2015.

Mayer said there will be 810 million DTC paid subscribers globally by the end of 2020 — growing 30% annually. With 1.2 billion hours of video streamed daily projected by 2020 compared to 260 million hours in 2015 — up 50% annually over a 10-year period.

[DTC] is becoming a crowded marketplace, in which brands matter more than ever,” Mayer said. “We have the brands that matter most when it comes to great entertainment.”

Mayer said Disney three domestic DTC products — Disney+, ESPN+ and Hulu — would target different market segments as standalone services and “likely be bundled to create even more value to consumers.”

Disney is eyeing a Latin America launch for ESPN+ as well.

Launching in November, Disney+ will feature catalog, current and original content from Disney, Marvel, Pixar, Lucasfilm and National Geographic — the latter due to Disney’s $71.3 billion acquisition of 20th Century Fox.

Mayer said Hulu, which Disney assumed majority ownership stake following the Fox acquisition, represents Disney’s most-established DTC product.

“We’re actively evaluating international rollout strategies for [Hulu],” he said.

Disney said Hulu was the fast-growing domestic SVOD service in 2018, ending the year with 25 million subscribers since launching in 2008. Online TV service — Hulu with Live TV — launched in 2018. Viewing increased by 75%.

“Hulu is going to give consumers the right product at the right price,” said Hulu CEO Randy Freer.