Disney+ Hotstar, despite being India’s largest OTT platform, finds itself in a constant battle to keep subscribers hooked, as evidenced by the latest financial results for the fourth quarter of fiscal 2023, which ended September 30, 2023. The number of Dinesy+ Hotstar paid subscribers reached an all-time low of 37.6 million in Q4 FY23, with a 7% QoQ drop. The annual picture is even more concerning, with the streaming platform witnessing a huge 38.7% YoY decline in its paid subscribers during the September quarter. This decline is starkly evident, falling from a record high of 61.3 million recorded in Q4 FY22.
Despite the subscriber slump, there is a notable improvement in the average monthly revenue per paid subscriber. Disney+ Hotstar generated an average of $0.70 or Rs 58 per month from each paid subscriber during the September quarter of 2023, with an impressive 20.7% YoY and an 18.6% QoQ increase. However, it’s worth noting that even with this improvement, Hotstar lags behind other Disney OTT platforms in terms of overall revenue. The platform’s low-price subscription model contributes to its status as the lowest revenue contributor to the parent company’s total revenue.
Looking at the broader Disney+ landscape, the total number of Disney+ subscribers in the US, Canada, and International markets (excluding Disney+ Hotstar) increased 9.4% YoY and 6.5% QoQ in Q4 FY23, to an all-time high of 112.6 million. The average monthly revenue per paid subscriber of Disney+ Core also increased 12.4% YoY and 1.8% QoQ to $6.7 during the quarter.
Shifting focus to Hulu, the number of paid subscribers increased 2.8% YoY to reach a record high of 48.5 million during fiscal Q4 2023. However, on a quarterly basis, the streaming platform recorded a negligible 0.4% QoQ growth in paid subscribers.
The average monthly revenue per paid subscriber of Hulu SVOD Only and Hulu Live TV + SVOD also declined nearly 2% QoQ during the September quarter of fiscal 2023. Despite this, Hulu still remains the highest revenue-generating platform among all of Disney’s OTT platforms. The company generated an average of $12.11 from each Hulu SVOD-only subscriber per month and $90.08 from each Hulu Live TV + SVOD subscriber per month during the quarter. This financial resilience reaffirms Hulu’s significance as a key player in Disney’s OTT portfolio, contributing substantially to the company’s overall revenue.
ESPN+ also achieved a remarkable milestone, with paid subscribers reaching an all-time high of 26 million in FY Q4 2023, with 7.0% YoY and 3.2% QoQ increase. This is mainly due to its focus on live sports and its ability to attract a younger audience. The average monthly revenue from each ESPN+ paid subscribers also grew 10.3% YoY to $5.34 during the quarter. However, on a quarterly basis, there is a 2% decline in the ARPU in Q4.
Disney’s Struggle With Hotstar
The number of Disney+ Hotstar paid subscribers has consistently declined since the first quarter of fiscal 2023, which concluded on December 31, 2022. Taking a broader perspective, in Q1, Q2, Q3 and Q4 of FY23, the subscribers declined 6.2% QoQ, 8% QoQ, 23.6% QoQ, and 6.9% QoQ, respectively. Over these four quarters combined, Disney+ Hotstar lost a considerable 23.7 million paid subscribers in India.
The decline in Disney+ Hotstar subscribers raises a perplexing question, especially considering the platform’s triumph in achieving record-breaking live-stream viewership during Cricket matches.
It begs the query: is Disney+ Hotstar primarily capturing the attention of Cricket enthusiasts while struggling to engage audiences with movies and original shows?
Looks like the movies and original shows on Disney+ Hotstar are not hitting the sweet spot for India’s diverse audience.
The decline in Disney+ Hotstar paid subscribers during fiscal 2023 can be largely attributed to the loss of streaming rights for the Indian Premier Cricket League (IPL) to Viacom18 in 2022, and the exit of HBO content from the Hotstar platform. As if these losses weren’t enough, the battleground of Indian OTT saw intensified competition, with JioCinema emerging as a formidable contender.
India’s budget-savvy mindset is also posing a challenge for global OTT giants, impacting Disney+ Hotstar, Netflix, and Amazon Prime Video. Disney+ Hotstar has three paid subscription plans in India. Two of these plans are ad-free, priced at Rs 1499 per year and Rs 299 per month, while the third is ad-supported and comes at Rs 899 per year. On the other hand, its rival JioCinema takes a simpler route with a single Rs 999 per year plan, but with ads.
And, if that’s not all, the Indian companies’ decisions to end work-from-home (WFH) and actively adopt the hybrid work culture are also making a dent in the Disney+ Hotstar revenue books.
In response to these challenges, Disney India is reportedly considering a game-changing move – selling Disney+ Hotstar to Reliance Industries. The ongoing talks about a potential merger or acquisition between the two giants hint at a seismic shift in the OTT streaming landscape of India. Should this merger materialize, it could create a streaming powerhouse that could go head-to-head with heavyweights like Netflix, Amazon Prime Video, and Zee5 in India. The stage is set for a streaming showdown, with potential ripple effects reshaping the dynamics of OTT in India.