Disney+ Hotstar is done with premiumisation

After saying goodbye to IPL, HBO, and Formula One, it is going back to its mass entertainment roots

Streaming TV content has always been crucial to Disney+ Hotstar because it brings the most subscribers to the platform after the IPL

But in the absence of the IPL, this large, loyal, and repetitive audience is becoming even more important

The streaming service is now firing all cylinders to retain them, offering them what they love and nudging them to try new things

But it is also doing it at a time when spending on original programming across the world is seeing a dip, and its parent is cutting costs

“No one around me is working with a show of The Night Manager’s or Sacred Games’ scale,” said a senior executive at a large production house that works with India’s major over-the-top (OTT) content providers. Five other senior executives across three large production firms confirmed the shift away from original shows featuring Bollywood A-listers like Saif Ali Khan and Anil Kapoor, and costing ~Rs 50 crore (~$6 million) per season to The Ken.

The move is along expected lines as after years of investing big in original programming, streaming platforms across the world reined in reined in Bloomberg Layoffs and Cost Cuts Usher in a New Era for Streaming Read more spending on big-budget shows. Amid this transition, one streaming service in India has got everybody’s attention, as it’s imperative for the platform to continue churning out original content. And it also happens to be the biggest one.

Towering presence

Disney+ Hotstar is the undisputed OTT market leader with ~50 million subscribers. Amazon Prime and Sony Liv each have ~20 million, while Netflix is estimated to have only ~7 million subscribers

As Disney+ Hotstar stares at the first summer without its once-marquee property—the Indian Premier League (IPL)—it’s doubling down on entertainment content. This is to fill the gap left behind by the loss of digital rights digital rights The Hindu Businessline Historic mandate. Viacom18 bags broadcasting rights for Women’s IPL 2023-27 Read more for the most popular cricket tournament in the world to Reliance Industries Ltd (RIL)-backed media company Viacom18 Media Pvt. Ltd.

The firm’s subscriber base has shrunk by 3.8 million since October 2022 to 57.5 million across India and Southeast Asia as of March. Moreover, analysts expect expect CNBC TV18 Disney Hotstar subscriber base is falling and loss of HBO content and IPL will only accelerate it Read more its subscription-video-on-demand (SVOD) market share to fall by one-fourth to ~15% and its advertising-based-video-on-demand (AVOD) market share to contract by half to 11%.

The platform saw it coming when the renewal of the IPL digital rights became doubtful in early 2022 and moved quickly to cauterize the subscription bleeding, according to former and current Disney+ Hotstar executives.

AUTHOR

Soumyajit Saha

Soumyajit covers the operations of Big Tech companies and OTTs in India. Before The Ken, he covered equity and currency markets in Southeast Asia, Australia and New Zealand for Reuters. You can hit him up via email about anything, except money he allegedly owes you.

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