Walt Disney has announced a revised lower figure of its subscriber base from its streaming service in India Disney+ Hotstar owing to its decision of not going forward with airing the Indian Premier League (IPL) on digital and lack of clarity on the ICC and BCCI media rights renewal.
Christine McCarthy, Senior Executive Vice-President and Chief Financial Officer, stated that the company is updating guidance for Disney+ Hotstar to 80 million subscribers by the end of fiscal 2024.
Meanwhile, according to the recently released Q3 results, for the third fiscal quarter ended July 2, 2022, by Walt Disney, Disney+ Hotstar saw a surge in advertisement revenue due to IPL matches in the quarter. The company aired 64 IPL matches this season.
McCarthy spoke about Disney+ Hotstar not proceeding with the airing of IPL on the platform.
McCarthy also spoke about the way forward without having IPL in sight. While speaking at the press conference, she said, “We are, however, updating subscriber guidance for Disney+ Hotstar to up to 80 million subscribers by the end of fiscal 2024. We intend to refine this target over time as subscriber visibility in India will be clearer once the ICC and BCCI cricket rights sales processes are completed. As you may know, we recently made the disciplined decision to not proceed with the Indian Premier League digital rights, and we'll evaluate these rights with that same discipline. As we sit here today, we remain confident that Disney+ will achieve profitability in fiscal 2024 and look forward to several upcoming catalysts, including reaching a steady state of tent pole original content releases, delivery of premium general entertainment and international local originals.”
The company is expecting a growth in subscribers in fiscal 2024. According to McCarthy, “We are providing more detail on subscriber targets by separating our guidance into two categories: core Disney+ and Disney+ Hotstar. Excluding the impact of any significant future macro headwinds, our core Disney+ subscriber target range is 135 million to 165 million by the end of fiscal 2024, largely consistent with previously provided guidance that non-Hotstar Disney+ subscribers in 2024 would approximate 60% to 70% of the expected 230 million to 260 million total subscriber base.”
The company added 14.4 million new subscribers in the recently concluded quarter of which 6 million were core Disney+ and 8 million were Hotstar.
Bob Chapek -- Chief Executive Officer, threw more insights on the growth of the Indian market. He said, “We also secured exclusive TV rights for the upcoming 2023 to 2027 IPL season following a competitive process where we made disciplined bids with a focus on long-term value. We are excited to continue offering IPL to our linear customers in India where growth potential exists for our portfolio of more than 70 channels that reaches 90% of pay cable and satellite TV homes in the region.”
“Pay TV distribution in India continues to be a robust business with projected GDP growth expected to drive advertising and consumer spending. In fact, India is one of the only markets in which we are launching new linear channels”, he added.
The platform has also launched ‘Koffee with Karan’ Season 7 which is completely digital now.
Meanwhile, the company in the report said that IPL has been a great contributor to the platform's ad revenue with 64 matches this season.
The report mentions, “Lower results at Disney+ reflected higher programming and production, technology and marketing costs, partially offset by increases in subscription revenue and, to a lesser extent, advertising revenue. The increase in programming and production costs was primarily due to more content provided on the service, including the impact of airing 64 IPL cricket matches in the current quarter compared to 29 matches in the prior-year quarter. Higher subscription revenue was due to subscriber growth and increases in retail pricing, partially offset by an unfavourable foreign exchange impact. The increase in subscribers as well as in technology and marketing costs reflected growth in existing markets and, to a lesser extent, expansion to new markets. Advertising revenue growth was due to the additional IPL matches in the current quarter.”