If you can’t beat them, join them! At least on the strategywise. Media and entertainment giant Walt Disney, facing a deep erosion in subscriber numbers for its Disney+ Hotstar streaming service in India, will now be offering free cricket on smartphones, Reuters reports.
Disney’s streaming operations posted a loss of $41.5 million on revenue of $390 million for the year to March 2022, as per its last disclosed results. The Burbank-headquartered entertainment giant’s financial performance in the country is expected to worsen further, with accelerated subscriber exits that slashed its user base by a third between October 2022 and July 2023.
The subscriber exodus from Disney+ Hotstar is a direct fallout of Reliance Industries Limited’s snatching away IPL rights in a $2.9 billion bid last year, and streaming the games for free. This resulted in roughly 21 million of Disney’s 61 million users exiting its streaming platform by July.
“We were bullish on Indian subscribers’ propensity to pay. That’s not worked out,” said one of the sources quoted in the Reuters report. “Free cricket is the only bullet left.”
Disney plans to stream Asia Cup matches live from August 30 as well as the World Cup in October-November on smartphones for free. This could provide a much-needed boost to its subscriber base as it would enable 600 million smartphone users in the country to stream these matches.
The fresh strategy comes as Disney explores options of finding a joint venture partner or even a sale of its India business, the Reuters report notes.
The company has termed the strategy as a new “hybrid model” to drive advertising revenues by raising smartphone viewers while targeting new subscribers for the Hotstar TV app, where cricket will continue to remain under paid subscription plans.
This strategy is about “how we build a model which will allow us to drive two revenue streams more meaningfully,” Sajith Sivanandan, head of Disney+ Hotstar, said in an interview with Reuters. He added that Disney was confident that its user base in India would grow in the future.
Will these desperate measures work? Wethinks not. Free cricket doesn’t guarantee success, as obtaining streaming rights costs billions, and it takes years for advertising revenue to match the investment, Daoud Jackson, a senior analyst at Omdia, told news agency Reuters.
