Even though its streaming losses narrowed during the fiscal second quarter, global entertainment giant Disney could not help but continue to lose subscribers during the same period. For the quarter ended March 2023, Disney noted that it suffered a drop of 2% in its total subscriber base, mainly from its Indian Disney+ Hotstar streaming service.
For Q1 2023, Disney noted that its paid subscriber base dropped by 3.8 million to 57.5 million, while the same for the first three months of the year dropped by another 4 million. Overall, it marked its second consecutive quarterly drop and the decline of 8.4 million paid subscribers in the past few months, according to Walt Disney Co. As of April 1, 2023, Disney+ Hotstar has 52.9 million paid subscribers. The average monthly revenue per paid subscriber dipped by 20% from $0.74 to $0.59 for Disney+ Hotstar in Q2 as well.
For the same quarter, Disney’s revenue ($21.82 billion) and profit remained in line with the estimates set by Wall Street, while the total number of subscriptions of Disney+ (including Hotstar and Core) amounted to 157.8 million for the same period. The revenue grew by 13% QoQ, while its streaming losses narrowed by $400 million for the recently ended quarter as well.
“We’re pleased with our accomplishments this quarter, including the improved financial performance of our streaming business, which reflect the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success,” Robert A. Iger, ChCEO of The Walt Disney Company, said. “From movies to television, to sports, news, and our theme parks, we continue to deliver for consumers, while establishing a more efficient, coordinated, and streamlined approach to our operations.”
Coming back to Disney+ Hitstar, we find that much of the fall of the paid subscribers can be attributed to the flocking of users to rival streaming services such as JioCinema. With Disney’s failure to bag the digital streaming rights of the cash-rich Indian Premier League (IPL) till 2027 (which Mukesh Ambani’s JioCinema secured for ₹23,758 crores). With IPL matches being streamed live on Viacom18’s JioCinema app for free, it is unsurprising that users are shifting to the Indian platform. India, which is still Hotstar’s largest market, has about 53 million subscribers.
“Lower impressions were attributable to decreases in average viewership at our sports and non-sports channels. The decrease at our sports channels was primarily due to cricket programming, which reflected airing fewer Indian Premier League (IPL) matches in the current quarter compared to the prior-year quarter as the 2023 IPL season started approximately one week later than the 2022 season,” Disney said in its earnings report.
The impact of this news on the media and entertainment industry has been significant. Disney+ Hotstar’s success in India was seen as a key part of the company’s strategy to expand its streaming services globally. The streaming industry has become highly competitive in recent years, with companies vying for a greater share of the market. The drop in Disney+ Hotstar’s subscriber base highlights the intense competition within the industry and the importance of continually innovating and offering unique content to attract and retain viewers.
The fallout of this news on the media and entertainment industry remains to be seen. It may prompt Disney and its rivals to reevaluate their strategies and invest more heavily in content creation and marketing to stay ahead of their competitors. Additionally, it may lead to a shift in consumer preferences and expectations, with viewers demanding more diverse and high-quality content from streaming services.