Disney+ Hotstar, Walt Disney’s streaming service for India, reported a drop of half a million paid subscribers for the third quarter ending June 2014. This decline brings the paid member base down to 35.5 million, a 1.4% decrease from the previous quarter’s 36 million subscribers. This trend continues a pattern observed in six of the last seven quarters, except for Q1-FY24 when the service added 0.7 million subscribers. At its peak, Disney+ Hotstar had 61.3 million subscribers in October 2022. Disney’s overall global streaming biz swung to profit.
This decline occurred despite the T20 Cricket World Cup being held during the quarter and Disney spending heavily to get the streaming rights. During the World Cup, India clinched an ICC trophy after 11 years, which was expected to drive significant viewership and subscriber growth. However, despite a peak concurrent viewership of 53 million during the final match between India and South Africa, the service still saw a subscriber drop.
Despite the subscriber decline, Disney+ Hotstar’s average monthly revenue per paid subscriber rose to $1.05 from $0.70 in the previous quarter, driven by higher advertising revenues. The streaming service’s primary market remains India, with additional presence in Southeast Asia, including Indonesia, Malaysia, and Thailand. “We’re seeing growth in consumption and the popularity of our offerings, which gives us the pricing leverage we believe we have,” Disney CEO Bob Iger commented on the matter.
These figures come as Walt Disney prepares to merge its India unit with Reliance Industries, following a joint venture announcement on February 28. This transaction will combine the businesses of Viacom18 and Star India, creating one of India’s largest TV and digital streaming platforms. Reliance Industries plans to merge the digital streaming and television assets of both companies to form a “world-class” leader in entertainment and sports. RIL and its group companies will hold a controlling stake and invest ₹11,500 crore ($1.4 billion) to drive growth. The merged entity will have a post-money valuation of ₹70,352 crore ($8.5 billion).
Overall, Disney clocked $23.16 billion in revenue (exceeding the estimated $23.07 billion), marking an annual growth of 4%. Its earnings per share (EPS) amounted to $1.39, exceeding the estimated $1.19, while its total segment operating income increased by 19% to $4.225 billion compared with the same period last year. Its operating income was up by 19% to $4.23 billion, while its combined streaming business, which consists of Disney+, Hulu and ESPN+, turned a profit for the first time (posting an operating profit of $47 million).
Disney+ (excluding Disney+ Hotstar) added 0.7 million subscribers during the quarter, growing its subscriber base to 118.3 million. The U.S. and Canada region saw a rise to 54.8 million subscribers, while international markets (excluding those where Disney+ Hotstar is available) had 63.5 million subscribers, slightly down from the previous quarter. Looking forward, the company expects modest growth in its flagship streaming service’s paid member base in Q4. The company remains optimistic about its trajectory, with plans to improve margins over the coming years.
