Disney reported a third straight quarter of declining subscribers to its streaming business primarily on account of its Disney+ Hotstar direct-to-consumer offering in India losing 12.5 million subscribers.
Despite the loss of subscribers and posting a net loss of $460 million, shares of Disney rose by around 2.5 % to $90 in after-hours trading.
Disney reported a total Disney+ Hotstar subscriber base of 52.9 million at the beginning of April, falling to 40.4 million by July 1, a 23.6% decrease.
The subscriber losses at Disney+ Hotstar follow a July report that the House of Mouse was exploring its options to sell or find a joint venture for its business in India.
Disney to curtail investments in India?
Speaking on how Disney + Hotstar was shaping the long-term international streaming strategy for Disney, CEO Bob Iger was quoted as saying by Techcrunch, “We actually have been looking at multiple markets around the world with an eye toward prioritizing those that are going to help us turn this business into a profitable business. What that basically means is there are some markets that we will invest less in local programming but still maintain the service (emphasis ours).”
The subscriber losses at Disney+ Hotstar follow a July report that Disney was exploring its options to sell or find a joint venture for its business in India.
According to the Wall Street Journal, Disney has had engaged in discussions with at least one bank to determine a path forward to grow its TV and digital business in India, with the potential of sharing some of the cost with a partner. At the time, individuals familiar with the matter told WSJ that Hotstar is expected to lose 8 million to 10 million subscribers in the third quarter, which was exceeded as it lost 12.5 million subscribers.
The media behemoth’s DTC revenue increased 9% to total $5.5 billion, while operating loss decreased to $0.5 billion from a loss of $1.1 billion, per Disney’s earnings release, due to a “lower loss at Disney+ [and] higher operating income at Hulu and a lower loss at ESPN+.”
The earnings report added that improvement at Disney+ was “due to higher subscription revenue and a decrease in marketing costs, partially offset by higher programming and production costs and lower advertising revenue.”
