Disney's video streaming service Disney+ Hotstar has added 2.6 million paid subscribers for the quarter ended January 1, 2022, taking its total base to 45.9 million users.
The service accounted for about 35.4 percent of the total paid subscriber base of Disney+ for the quarter that stood at 129.8 million. This is the first time the entertainment conglomerate is breaking out the region-wise numbers of its flagship streaming service Disney+.
It's worth noting that Disney+Hotstar is currently available in India, Indonesia, Malaysia and Thailand, although a majority of the subscribers are from India.
Disney had launched Disney+ in India on top of Hotstar in April 2020 and rebranded the service as Disney+Hotstar. The service however operates on a freemium model where it offers some content on a free ad-supported model, unlike Disney+ which only offers paid subscriptions.
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Disney+ Hotstar's monthly average revenue per user (ARPU) rose to $1.03 from $0.64 in the prior quarter and $0.98 in the year-ago period. The company attributed this increase to the entry into new markets with higher average prices, partially offset by a higher mix of wholesale customers.
In September 2021, the service had also rejigged its pricing strategy, offering its entire content library to consumers through three different plans starting at Rs 499 for a mobile-only plan, Rs 899 (HD quality and support for two devices) and Rs 1,499 (4K quality and support for four devices).
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Prior to this, Disney+ Hotstar had two annual tiers - Rs 399 VIP plan that offered access to India originals and live sports and Rs 1,499 Premium plan that also offered premium English movies and shows.
That said, the service's monthly ARPU is quite low than other markets. An average Disney+customer in the United States pays $6.68 per month while an average International customer (excluding Disney+Hotstar) pays $5.96 per month.
Disney+ said it earned an overall average of $4.41 per month from each customer this quarter, however if Disney+Hotstar is excluded, the ARPU rises to $6.33 per month.
IPL media rights auction
These results come at a crucial time for Disney+Hotstar that is set to face its toughest challenge amid an expected bidding war for the media rights of the IPL tournament that will likely go on auction in the coming weeks. The tournament has been one of the major subscriber growth drivers for Disney+ Hotstar and will likely be key to its future growth.
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"it's an important component for us around the world. We are certainly going to try to extend our rights on the IPL. But we are very confident that even if we were not to go ahead and win that auction, we would still be able to achieve our 230-260 million Disney+ subscriber goal by the end of fiscal 2024" Disney CEO Bob Chapek said during the company's earnings conference call.
Chapek said that local content that they are developing, including the library content from its own brands Disney, Pixar, Marvel, Star Wars and Nat Geo, will mitigate the impact if they don't win the auction. "Our Disney+ Hotstar offering does have a massive collection of local content, and we add over 18,000 hours of original programming every year" he said.
For the financial year ended March 31, 2021, the service had posted a net loss of Rs 600.8 crore, up from Rs 361.8 crore loss in the previous fiscal. Total revenues also saw a modest 5 percent increase to Rs 1,670.6 crore in FY21, from Rs 1,593.02 crore in the previous year.
Subscription revenues grew by 34 percent to Rs 830.96 crore during the financial year, while advertising revenue was down 15 percent to Rs 829.7 crore.
Global performance
Globally, revenues from Disney's direct-to-consumer (D2C) segment, which comprises all its streaming services, grew 34 percent year-on-year to $4.69 billion for the quarter while operating loss increased 27 percent to $0.59 billion from $0.46 billion in the year-ago period, due to higher losses at Disney+, the company said.
The entertainment conglomerate now has around 196.4 million subscribers across its streaming services— Disney+, ESPN+, and Hulu—at the end of the quarter.
Overall, Disney posted total revenues of $21.8 billion for the quarter, a 34 percent increase from $16.25 billion in the same quarter last year. Net profit was at $1.15 billion for the quarter, compared to $29 million profit from a year-ago period.
