When Disney purchased 20th Century Fox in 2019, it also acquired Star India, which included the streaming service Hotstar, film studios, an array of over seventy linear channels, and much more. Shortly after the initial launch of Disney+ in many countries around the world, Hotstar was relaunched as Disney+ Hotstar, offering a wide selection of local Indian content, along with the five core pillar brands of Disney+, including Star Wars, Marvel, Pixar and National Geographic.
The boost from Disney+ Hotstar saw subscriber numbers explode by over 60 million, but while those numbers were huge, there were some problems for the Indian streaming service. One of the biggest issues facing Disney was that each Disney+ Hotstar subscriber was only bringing in around 60 cents per month, compared to around $7 outside of India. So Disney pulled out of bidding on the Indian Premiere League Cricket rights, which would cost them billions of dollars, but in doing so, Disney+ Hotstar lost over 20 million subscribers, causing huge headlines and concerns over the future of Disney+.
Recently, Sajith Sivanandan, the head of Disney+Hotstar India, spoke with LiveMint about how they’ve been changing their focus away from just focusing on sports fans.
We grew on the back of a lot of sports properties with the peak around the T20 World Cup. Since then, we’ve been going through our next phase of evolution. Yes, IPL played a crucial role in our journey and brought in a certain set and type of subscribers to us. Now that IPL is not with us, we understand those subscribers won’t continue to engage with us. And we are prepared for those changes as a result of it,”
Over the past few months, Disney has been speaking with many companies, including Sony, Reliance and others, about potentially selling some or all of its assets in India, to refocus on its core businesses and, more importantly, focusing on profitability, rather than higher subscriber numbers. Sajith has spoken about Disney’s plans for the long term and how sports content isn’t something they are as focused on, adding:
“By the long term, I don’t mean like a year, two or three. It is what we are building over the next decade. What would that be? We were predominantly known as a sports-driven service. Now, we are trying to find the right balance between sports and entertainment. Because the beauty of India is that there is a vast audience who enjoy not just sports, but entertainment. I genuinely believe we’re in a great place with the portfolio we have, and we can address those needs.”
Recently, Disney CEO Bob Iger has spoken out about how the company will be slowing down the amount of local content it creates, only doing so when it makes business sense and, more importantly, when it helps make money for the platform. Instead, its focuses its efforts on a more curated lineup of global shows. Sivanandan shared some insight into how this might impact on Disney+ Hotstar:
“The foundational construct of any business ought to be to build a sustainable business. Nobody gets into business to lose money. So, we’re all aligned on it. And it’s important to look at things like unit economics, what does it take to profit, what’s the path to profitability. So, we are trying to build a hybrid model here. (That said), this is not some newfound model that we have invented. We were a very intensively-driven SVOD (subscription video on demand) business. Now, under a hybrid model, we will have a robust ad-driven offering, combined with a very premium, subscription offering.”
Disney+ Hotstar offers a wide selection of different shows and films, not just from Disney’s own core brands, but from a huge selection of original content made in India. Which Sajith wanted to highlight:
“What does not get talked about enough is our incredible set of assets on the entertainment side. We built a great set of franchises under Hotstar Specials. A lot of people look forward to franchises like Arya, Criminal Justice, Night Manager, etc. This may be debatable, and I may be biased, but I don’t think there’s any other provider that has as rich a depth of regional content as we do across Tamil, Telugu and Malayalam. We are getting into a phase, where it’s not just oriented around cricket, but a wide set of assets. We genuinely believe we are here to serve many Indias, not just one India.”
With a big cloud hanging over the future of Disney Star in India, following reports of Disney looking to sell some of its assets, Sajith wanted to emphasise that:
“We are in this for the long term. And, if we serve users well, we’ll make money.”
Disney is reevaluating its costs, especially with international content and the linear television business. Disney has already closed many linear channels across the world and has even been looking into selling some linear channels in the United States, so it wouldn’t be a surprise to see Disney refocus its efforts in India on just Disney+ Hotstar, but hopefully, we get an update on Disney’s plans for India soon. Selling Hotstar is a possibility, but it would also result in Disney losing its own direct-to-consumer platform, which can currently reach over 40 million subscribers a day and potentially many more. Will Disney want to give that future up? Sajith Sivanandan seems to indicate there are still plans for Disney+ Hotstar for years to come.
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