Following the loss of the Indian Premier Cricket League, after JioCinema spent $3 billion on the streaming rights, Disney+ Hotstar has seen millions of subscribers leave the platform. While the loss of the IPL has helped the bottom line for the streaming service, since the cost of the cricket rights was too high in Disney’s view to warrant the cost, especially as the Indian streaming service saw a loss last year.
But today, Disney is looking to try to recover some of those subscriber losses by offering free cricket on smartphones and tablets in India. The free cricket on offer includes the Asia Cup, which takes place from August 30th, along with the World Cup, which is hosted by India this year, and takes place between October and November.
The head of Disney+ Hostar, Sajith Sivanandan, said this is a new “hybrid model”, which is aimed at boosting advertising revenues by increasing the volume of smartphone users accessing the service for free, while at the same time pulling in new subscribers for its paid plans. This strategy is about “how we build a model that will allow us to drive two revenue streams more meaningfully,”
When Disney first acquired Hotstar through its purchase of 20th Century Fox, it moved the IPL cricket from a free offering into its paid plan within what was renamed Disney+ Hostar. However, according to a source at Reuters, Disney executives had miscalculated the appetite of Indian consumers to switch from free viewing to premium plans.
“We were bullish on Indian subscribers’ propensity to pay. That’s not worked out. Free cricket is the only bullet left.”
Once JioCinema gained the rights to the IPL, it started offering those cricket matches for free, which resulted in around 21 million subscribers leaving Disney+ Hotstar. It should be noted, that Disney had been preparing for these losses and advising in advance, since they felt that paying billions of dollars for access to the IPL would have cost them more in the long run, since each subscriber in India, only brings in around 60 cents per dollar per month, compared to a core Disney+ subscribers outside of Indian, bringing in over $7 a month. Since Disney+ will cost $13.99 a month by the end of the year in the US, compared to just $3.62 a month in India.
Daoud Jackson, a senior analyst specialising in streaming businesses at UK research firm Omdia, said free cricket was not a sure-shot winner as companies pay billions of dollars to get streaming rights, but commensurate advertising revenue takes many years to materialise.
Recently, Disney has also started exploring the possibility of finding a partner for its Indian business or even selling some of its assets, as Disney has started pulling back on some of its international plans as part of a restructuring.
Offering the World Cup, could bring possibly up to 450 million customers, which will see Disney get money from advertising it sells for the free coverage, with Disney looking to break a record of 50 million concurrent viewers during the World Cup.
Disney’s Sajith Sivanandan has made deals with Coca-Cola, which will see a QR code added to over 400 million Coke bottles with a free Hotstar Offer, hoping to bring back some subscribers. It is also offering targeted advertising that could offer interactive ads connecting watchers to a brand’s WhatsApp chat to enable purchases of the products.
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Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom.