Disney+ Hotstar announced that it will discontinue streaming HBO content on the platform starting March 31, 2023.
Media experts anticipate that HBO content moving out of Disney+ Hotstar will significantly impact the platform.
In a recent tweet, Disney+ Hotstar wrote, “Hi! Starting 31st March, HBO content will be unavailable on Disney+ Hotstar. You can continue enjoying Disney+ Hotstar’s vast library of content spanning over 100,000 hours of TV Shows and Movies in 10 languages and coverage of major global sporting events.”
Karan Taurani, Senior Analyst at Elara Capital, said, “The move will have a significant negative impact on paid subscribers for Hotstar India.”
Last year, D+H lost digital media rights of the Indian Premier League to Viacom18, ending its five-year monopoly of IPL rights, due to which its subscriber base also fell.
Disney+ Hotstar’s paid subscribers fell 6% in the first quarter ending December 31 to 57.5 million from 61.3 million in the previous quarter.
The IPL digital rights had helped Disney+ Hotstar fetch a leadership position in the Indian OTT market in the last few years. According to a report, it had a 50% market share in the SVOD OTT space as of April 2022.
Taurani added, “We maintain that the loss of subs will continue to happen towards June 2023 quarter due to IPL. In terms of the recent HBO content moving out of Hotstar, we estimate the subscription loss moving towards the upper end (around 25-30% in total), of the 61.5 million subs at the peak.”
Although he did mention that Disney+ Hotstar’s active paid subscriber base for Hotstar could settle at 42-45 million over the next three quarters. “There is still respite in the form of catch-up TV content, which drives a large chunk of broadcaster OTT content. Star is the market leader for TV content). It also has media rights for the Cricket World Cup (T20) and other Indian and international cricket content. The platform also has a massive global and Indian movie catalogue.”
He further said, “BCCI is expected to renew its contracts for India matches this year and if Hotstar ends up losing that for 2024 and beyond, then it will be a bigger blow as the active paid subs base can move even below 40 million over the medium-term.”
D+H has been streaming HBO original shows since January 2016. In December 2015, Disney Star struck an exclusive tie-up with HBO in December 2015. HBO’s shows such as Succession, The Last of Us, Game of Thrones, Watchmen and The Wire formed a major pillar of its content.
A month ago, Disney CEO Bob Iger announced his plans to cut $5.5 billion in costs. This cost-cutting includes about $3 billion in non-sports-related content and $2.5 billion in non-content-related costs.
The company had also laid off around 7,000 employees of its global workforce, as part of this measure.
Not just IPL and the original library of content from HBO, Star Sports and Disney+ Hotstar did not renew streaming media rights to Formula 1 races in India. F1 introduced its own OTT platform F1 TV, to broadcast F1 races in India.
In an interview with Reuters, F1 sports director of media rights, Ian Holmes told Reuters, "We obviously talked to Star and one or two other more traditional platforms and we felt that they didn't value our rights in the way that we did.”
For Disney+ Hotstar to not lose the game, Taurani suggested that the platform needs to aggressively invest in fresh and original content. “Netflix too had seen some pressure due to its loss of Disney content in 2019. However, they invested in building original IP and shows which has paid rich dividends over the last four years. We expect Hotstar to also invest aggressively into fresh and original content which needs to click well with the audience in order to ensure subscribers retention and minimise the negative impact. Investment into original content and new IP takes some time as this requires a transition time (12-18 months),” Taurani commented.
Ever since the platform posted on Twitter about the ending of its partnership with HBO, several users have been demanding a refund of their subscription fee. Many others are also asking the platform to reduce its prices since IPL, F1 and several HBO shows won’t be available.
“My subscription got renewed last month. Request you to process a refund on a pro-rata basis,” wrote a user on Twitter.
“How one can get refund, if subscribed for whole year? Without F1, HBO, why would even I continue to pay? Please share the procedure to initiate refund, as I want to terminate my subscription,” demanded another user.
One person said, “It is time to reduce your subscription price.”