Shubhiksha GV, Pune
Walt Disney (DIS.N) is strategically moving to renew its streaming operations in India by offering free cricket content on smartphones. The company is wagering that this approach will boost advertising revenue and counteract the impact of a substantial decrease in subscribers. The Indian streaming division, registered as Disney’s most significant globally by users last year, posted a loss of $41.5 million alongside revenue of $390 million for the fiscal year ending March 2022, as per its previously disclosed results.
The streaming landscape in India has witnessed subscriber exits accelerating, leading to a notable decline in the user base between October 2021 and July 2022. This downward subscription trajectory has placed additional financial pressure on the entertainment conglomerate.
Disney’s decision to offer cricket content free of charge underscores the company’s response to subscriber challenges and competitive dynamics within the Indian market. While the streaming giant initially acquired Indian streaming service Hotstar as part of its acquisition of 21st Century Fox assets in 2019, the departure of a significant portion of its user base was accelerated when Indian billionaire Mukesh Ambani secured streaming rights for the Indian Premier League (IPL) and began streaming games for free.
Disney’s internal analysis highlights a miscalculation in Indian consumers’ willingness to pay for premium content beyond cricket. The company’s strategic shift towards free cricket content on mobile phones and tablets represents an effort to pivot its financial performance in India. This new “hybrid model” aims to leverage smartphone viewership to drive advertising revenues while retaining the cricket content under paid plans on the Hotstar TV app.
Disney’s approach includes streaming live matches of the Asia Cup starting August 30 and the World Cup in October-November. These matches can be accessed by the extensive user base of 600 million smartphones in India without incurring any charges. The company anticipates a growth in viewership during these cricket tournaments, targeting existing and potential users.
Sajith Sivanandan, Head of Disney+ Hotstar, highlighted the strategic vision behind this move, emphasizing the company’s confidence in expanding its user base in the years ahead. The goal is to facilitate access to cricket content for a broader audience, enhancing the advertising reach. This approach is also reflected in partnerships with brands such as Coca-Cola, where QR codes on Coke bottles offer Hotstar trials to prospective users.
While Disney’s move aligns with expectations of a growing streaming market in India, industry analysts offer caution. The challenge lies in translating high-quality streaming rights into commensurate advertising revenue, especially in a market where price-conscious consumers play a critical role. Despite the hurdles, Disney’s efforts indicates its commitment to navigating India’s evolving streaming landscape while balancing revenue streams and audience engagement.