MUMBAI: A little over a year after The Walt Disney Company launched its streaming service Disney+, it was the media behemoth’s plans for its direct-to-consumer business that was front and centre at its 2020 Investor Day event on Thursday.
That investors were fully on board with the company’s plans was reflected in the shares of The House of Mouse reaching their highest-ever closing price, at $154.43 a share, DESPITE the Disney Parks, Experiences and Products segment recording a loss of $1.1 billion in Q4 2020, ascribed to the fallout from the COVID-19 pandemic.
The company also revealed the ambitious next steps in its global streaming expansion at its 2020 Investor Day, with new details on the future of its direct-to-consumer services Disney+, Hulu and ESPN+, the first look at its upcoming international general entertainment content brand, Star, and previews of an exceptional slate of all-new content.
Bob Chapek, chief executive officer, and Bob Iger, executive chairman, led the virtual event, which included presentations from leaders of the company’s content and distribution teams, along with financial updates from Christine McCarthy, senior executive vice president and chief financial officer.
Chapek said: “In terms of the general entertainment offering internationally, we want to mirror our successful Disney+ strategy by using our Disney+ technical platform, bringing in content we already own and distributing it under a successful international brand that we also already own, which is, of course, Star.
“The tremendous success we’ve achieved across our unique portfolio of streaming services, with more than 137 million subscriptions worldwide, has bolstered our confidence in our acceleration toward a DTC-first business model. With our amazing creative teams and our ever-growing collection of the high-quality branded entertainment that consumers want, we believe we are incredibly well positioned to achieve our long-term goals.”
The company announced that, as of December 2, its portfolio of direct-to-consumer services has exceeded a total of 137 million global paid subscriptions, including 11.5 million ESPN+ subscribers, 38.8 million Hulu subscribers, and a staggering 86.8 million Disney+ subscribers since its launch in November 2019.
Of the 86.8 million Disney+ subscribers, about 30% (or 26 million) are via Disney+ Hotstar in India, said Disney International Operations and Direct-to-Consumer segment chairman Rebecca Campbell during her presentation at the event. Disney+ Hotstar, which was launched in India in April and in Indonesia in September, was built on Hotstar, the streaming service operated by Star India that Disney inherited when it acquired 21st Century Fox.
This is a rapid jump from the 18.5 million paid subscriber base that Disney+ Hotstar had as of September, exchange4media reports. The platform has added roughly 7.5 million paid subscribers in two months.
The strong subscriber acquisitions were driven by the Indian Premier League (IPL), which was held in the UAE from September 19–November 10.
“With a rapidly growing middle class, India is a promising market opportunity and we are uniquely positioned to succeed in the country due to our existing presence with Star TV and Hotstar,” said Campbell.
She further stated that Disney+ Hotstar currently offers content in seven Indian languages and is adding about 17,000 hours of original local programming every year.
“This strategy is our template for other South Asian markets that are also driven by local content and mobile consumption, with Indonesia being the first market,” Campbell said.
During the Q4 earnings conference call on November 12, Disney had stated that Disney+ Hotstar subscribers accounted for a little over a quarter of its global base of 73.7 million paid subscribers. Disney+ Hotstar had generated an average revenue of $2.19 per user in India in the September-ended quarter, e4m quotes the company as having disclosed then.
“Disney+ ended Q4 with 73.7 million paid subscribers, or an increase of over 16 million subscribers versus Q3. Disney+ Hotstar subscriber additions were the largest contributor to this increase, driven by the start of the delayed IPL season. Disney+ Hotstar subscribers now account for a little over a quarter of our global subscriber base,” McCarthy had said then.
On Thursday, meanwhile, building on the successful launch of Disney+ Hotstar in India and Indonesia, Disney shared new details for its international general entertainment content brand, Star, which will be included as part of Disney+ in select international markets.
In Latin America, to take advantage of the region’s portfolio of live sporting events, the company will launch Star+ as a standalone streaming service in June 2021. Star+ brings together an unrivaled Star content collection, local original productions, and an array of live sports from ESPN, including top football leagues, Grand Slam tennis, and more.
Disney+
Disney+ now has 86.8 million subscribers. That’s up from the 73 million that the company reported at the end of its fiscal fourth quarter.
Campbell said the launch in Latin America was a strong success for the company and Disney+ will launch in Eastern Europe, South Korea and Hong Kong in 2021.
In Europe, Canada, Australia, New Zealand and Singapore will have Star integrated into the Disney+ app starting February 23, 2021.
Campbell also said the company is set to reach peak losses in fiscal 2021 and will achieve profitability by fiscal 2024.
As for ESPN+, the sports streamer will garner 20-30 million subscribers by the end of 2024, Campbell predicted, and reach profitability the year before, in 2023.
Additionally, Walt Disney said it will be forking out $14-$16 billion in content spending in fiscal 2024 on streaming services Disney+, Hulu and ESPN+ as it ramps up original series and films to the tune of 100 a year.
Between $8-9 billion of that will go to Disney+, McCarthy said. That’s at least double what was initially anticipated due to surging investment on original content.
McCarthy confirmed that the streaming products will remain ad free.
