CEO Bob Bakish: IPL Cricket Key to Paramount+ Indian Launch in 2023

When Viacom18 — which is 49% owned by Paramount Global — earlier this year paid 205 billion rupees ($2.6 billion) for the streaming rights to the Indian Premier League (IPL) covering 410 cricket matches over a five-year period, the move was seen as a potential blow to Disney+ — and a win for Paramount+.

Speaking Aug. 4 on the fiscal call, Bob Bakish, CEO of Paramount Global, reiterated why the media giant and The Walt Disney Co. spent a combined $5.6 billion on rights to a sport most Americans have never heard of.

“Cricket is at the top of the food chain in India,” Bakish said.

Indeed, since the launch of Disney+ in late 2019, the IPL has played a key role in the SVOD’s burgeoning subscriber growth. Disney acquired the cricket rights through its acquisition of 20th Century Fox Studios from Fox Corp. The studio’s Hotstar streaming platform currently holds the IPL rights. Disney retains the linear rights.

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How that plays out for Disney+ is the $64,000 question. Currently Hotstar with the IPL represents more than 50 million Disney+ subscribers, or almost 37% of the SVOD’s subscriber base. Without the IPL, that percentage is likely to plummet and shrinking the Disney+ global subscriber base significantly.

Bakish said Paramount+ plans to offer cricket as part of a “hard bundle” tiered pricing plan, benefiting from the association while not directly investing financially as a distributor.

“It will be a real engine for streaming,” Bakish said. “And Paramount+ will benefit by being part of that … because we get the very material benefit of cricket.”

Disney Streaming Subscriber Growth in the Crosshairs

NEWS ANALYSIS — With Disney’s branded subscription streaming video-on-demand service, Disney+, the companywide focus since launching two years ago, all eyes Nov. 10 (after the market closes) will be on whether the platform sustained subscriber growth through the fiscal fourth quarter, which ended Sept. 30.

Disney+ ended the third quarter of this year with 116 million subscribers, an impressive tally for a service less than 2 years old. But as previously reported, one-third of those subs hail from India through Disney’s acquisition of the Hotstar streaming platform from Fox.

But in September, CEO Bob Chapek told an investor event that Disney+ could see challenges to its prolific sub growth due to ongoing issues in India, including timing of the professional cricket season coinciding with a rollover of existing Disney+ subs.

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Unlike in the United States, where Disney+ subscriber memberships automatically roll over on a monthly basis, in India Disney signed millions of subs to annual contracts that are not allowed to automatically renew in accordance with federal law. As a result, streaming memberships have to be renewed on an individual basis.

“Every time you lose that [sub], you have to get that [sub] back,” Chapek said at the Goldman Sachs event, adding that with the reboot of the Indian Premier League (cricket), there would lots of incentive among subs to renew.

Chapek cautioned Disney+ subscriber growth in India could fall to low double-digits or below.

“You have to take a step back before you can take a step forward in terms of those [Indian] renewals,” he said. “It’s a claw-back if you will.”

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Meanwhile, Disney+ continues to operate on all cylinders. The platform had 288.7 million unique visitors across all media devices, according to Morgan Stanley, which was up almost 75% from a year ago, and almost 5% from the previous quarter. Unique page views increased by 81.4% from January to September 2021, compared with the same period last year.

“We see Disney on the short list of global streaming majors,” the research firm wrote in a note. “Despite significant continued upward earnings revisions, shares have lagged as net [sub] add expectations ran ahead of content deliveries. As the content pipeline builds into 2022 and 2023, core net [sub] adds should accelerate.”