Following JioCinema's strategy to stream IPL for free, Disney+ Hotstar on June 9 announced that the Asia Cup and ICC Men’s Cricket World Cup tournaments - scheduled to be held later this year - will be made available as free-to-view to all mobile phone users.
While Disney+ Hotstar’s intent is to increase both the subscriber base and monetisation through AVOD with the property behind a paywall on CTV and free on mobile, advertisers are expecting a higher reach, lesser CPM and improved interest-based targeting.
Shashank Srivastava, Senior Executive Director, Marketing and Sales, Maruti Suzuki, told BestMediaInfo.com that for advertisers, there will be a 10-15% reduction on CPM for mobile (250 CPM to now 220-230 CPM).
“Further, interest-based targeting can be done in addition to improved demographic plus device price-based targeting. Although, the cost of advertising on CTV will remain the same,” he said.
Somasree Bose, Chief Marketing Officer, Marico, said that this move by Disney+Hotstar will democratise the reach of the content to the consumer who will in turn likely increase time spent on the platform, in the process increasing ROI for advertisers and ARPU for the platform, making it a win for all three key constituents (publishers, brands and consumers) of the ecosystem.
“Cricket has a natural break pattern which allows for advertising to co-exist with content without breaking its flow, which explains why despite going behind the paywall advertising was never pulled off this genre. However, the primary implication of the paywall was a truncation of access to a high-affinity content genre for a vast majority of consumers. This led to a ceiling on mid-roll reach that these premium properties could deliver for brands investing in them,” she said.
Srivastava of Maruti Suzuki shared that Disney+ Hotstar is eyeing to double its reach during the World Cup and a 50% increase in viewership during the Asia Cup.
“During IPL the subscriber base for Hotstar has dipped by around 4 million (52 million to 48 million) and hence they want to gain 5-6 million subscribers during both Asia Cup/World Cup. On viewership, they expect to almost double the reach of the World Cup (230 million during last year to 450 million in the target year) and for the Asia Cup they expect to increase it by 50% (190 million during last year to 300 million in target year),” he said.
As per Sumeer Mathur, Chief Strategy Officer, Dentsu Creative India, “While the ad revenue may not make up for the investments, it could open up the field for a lot smaller advertisers, who shy away from big-ticket events.”
He further said, “Cricket is an abiding passion in India. And this move sends the message that the game isn’t over yet, if anything it's becoming more intense with Disney+ Hotstar not ready to give up its pioneer position in OTT sports yet. It will help them target half a billion smartphone users and ensure that there is a real hook for them to stay with Disney+ Hotstar.”
Experts also pointed out that this move by Disney+ Hotstar is an attempt towards getting its viewers back which they lost when Viacom18 offered all Indian Premier League (IPL) matches on its streaming platform JioCinema free of cost in the 2023 season.
Anita Nayyar, COO, Media, Branding and Communications at Patanjali Ayurved, said, “The move to go free for Asia Cup and ICC will surely get the audience back on the platform, however, not necessarily all of it that moved out. What will be key is to retain the audience as to advertisers it is eyeballs that matter.”
Gaurav Mehta, CMO, Noise, said that by opening streaming access for mobile users, Disney+ Hotstar is making premium sporting events reachable to a wider audience. On the other hand, this step by Hotstar may further put the subscription revenue under duress.
“I am sure Disney+ Hotstar has consciously devised the strategy. It’s always an uphill task to upgrade users’ journeys. These mega sports tournaments, further supported by the unwavering popularity of cricket, have remained the key factors driving subscriptions for the OTT platforms. The new provisional objective seems to aim at regaining the cricket spectators to help further scale up engagement during the series,” he added.
Karan Taurani, SVP- Research Analyst (Media, Consumer Discretionary and Internet), Elara Capital, said that if this move by Disney+ Hotstar continues over the medium term it may result in higher losses for over-the-top (OTT) platforms and lead to consolidation, as many may be unable to survive with low ARPU and free offerings.
“In our view, this move will negatively impact subscription revenue growth for global/broadcaster-led OTT platforms which are SVOD/freemium based respectively. Offering premium content free does not augur well, as Indian OTTs already deal with challenges like lower ARPU, high content cost, a fragmented market and dominance of social, search and commerce in the ad market,” Taurani stated.
“To compete with JioCinema in the digital video advertising segment, Disney+ Hotstar has decided to offer the upcoming Asia Cup and the Cricket World Cup free to mobile-only subscribers. We believe this will be a big disruption and change audience habits to pay for premium content,” he added.
As per Elara Capital, more than 90% of OTT consumption is routed via smartphones, as connected TV penetration (8%-10% currently) remains low, on low fibre broadband penetration, and high broadband ARPU.
Furthermore, he added that this means a section of the audience will watch premium cricket content free, and it may take time for other OTT platforms to undertake price hikes and start charging customers.
There is also a cause for concern over digital advertising, as it is cyclical in nature with higher dependence on internet and commerce companies and has no third-party measurement mechanism for video content, which limits the potential scale for video advertisements.