Why Is Disney+ Hotstar Losing So Much Content?
Later this month, Disney+ Hotstar is set to lose access to many shows from HBO, such as “The Last Of Us”, which will no doubt be a big blow for Disney+ Hotstar subscribers in India and make many question if they remain a subscriber. And Disney+ Hotstar has already suffered from the huge loss of losing access to the Indian Cricket Premier League, which saw over 4 million subscribers quit the platform earlier this year. The loss of 4 million subscribers, meant for the first time ever, during a quarterly financial results report, that Disney+ had lost subscribers, even though in the US and Canada, Disney+ actually had added over 200,000 subscribers.
The loss of millions of subscribers is, no doubt, not great, especially with headlines around the world saying that Disney+ lost subscribers. Yet, this loss has been planned. Disney has been making its shift from focusing on growing subscribers, to making a profit.
And that’s the big difference between subscribers of Disney+ and Disney+ Hotstar in India. In the last quarterly results, Disney makes only 75 cents per Disney+ Hotstar each month, compared to just under $6 per subscriber of Disney+. This means, Disney+ Hotstar needs around eight subscribers to make the same amount of money as one subscriber in the US! This is one of the major reasons why Disney+ Hotstar is being scaled back. Disney is trying to make over $5 billion dollars in cost-cutting, and it’s also laying off 7000 employees, so paying out for expensive cricket rights or licensing shows from another studio, was no doubt high on the chopping block.
Up until recently, Disney+ Hotstar in India has offered a much larger selection of content than Disney+ has in any country. Currently, it has almost 4000 titles, compared to around 2500 titles in countries like Canada and the UK, which also have access to the general entertainment Star hub. In the US, Disney+ really lacks behind in terms of content numbers, with under 2000 titles currently available, due to the majority of Disney’s general entertainment content being held on Hulu.
Recently, Bob Iger spoke at the Morgan Stanley Investors Conference and spoke about how they need to go after loyal subscribers:
It’s also obvious to us we can’t get the profitability and turn this into a growth business without growing subs. So, while we’re taking off-the-table sub guidance, we’re still going to look to grow subs. We just want to grow quality subs that are loyal and where we actually have an ability to continue to price effectively to those subs. In addition, we’re going to lean more into our franchises, our core franchises, and our brands.
I talked about curation and general entertainment. We have to be better at curating the Disney and the Pixar and the Marvel and the Star Wars of it all as well. And of course, reduce costs on everything that we make because, while we’re extremely proud of what’s on the screen, it’s gotten to a point where it’s extraordinarily expensive. And we want all the quality.
It does seem that Bob Iger is referencing those subscribers in India and that it’s simply too expensive to keep subscribers that aren’t actually interested in the content Disney makes.
Disney+ Hotstar is going to go through a shift in the coming year, as it will no doubt have its budgets cut and become more in line with how Disney+ operates in other countries around the world. A hub of content from Disney’s studios such as FX, National Geographic, Marvel and Star Wars, but also with local content. But the days of it being a massive streaming platform to rival a linear bundle, are going. Subscribers in India will no doubt still be important to Disney, but the days of Disney chasing cheap subscribers isn’t as important to them as it once was.
The loss of HBO content is going to be a loss for subscribers in India, but it’s the only country in which this content is available on Disney+. From a financial point of view, it makes sense to start stripping back content deals that are inherited from the purchase of 20th Century Fox. Disney+ Hotstar has also recently lost access to Formula 1 content, pulling more sports away from the platform.
While it might not be what subscribers in India will want to hear, Disney+ Hotstar needs to be streamlined to make Disney+ a better platform globally. Bob Iger has also said they are going to be scaling back how much general entertainment and local content they make around the world, so this will no doubt also filter down to Disney+ Hotstar subscribers.
Disney has to walk a thin line, keeping current subscribers happy, but also balancing the books and making Disney+ Hotstar more profitable. All of these differences in the type of content being offered to subscribers, are one major reason why Disney+ Hotstar in India has its own separate app. It’s very different to Disney+ around the world. In the US, Hotstar was closed down, with some content moving to Hulu and the sport to ESPN. Hotstar still exists in some countries like Canada and the UK, but in a scaled-back format. Disney+ Hotstar is evolving, becoming more inline with how the streaming service operates outside of India and no doubt, more changes are to follow. For fans of Disney’s own content, with films and shows from 20th Century Studios, Marvel, Star Wars, Pixar and Disney, there’s going to be plenty of content to enjoy, but sports and licensed content, no longer seem to be a focus.
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