Mumbai: Disney+ Hotstar has lost 12.5mn paid subscribers (24 per cent of the total paid subs) this quarter (Jun’23) and lost 33 per cent of subscribers over the last three quarters, since IPL digital media rights moved to Jio Cinema post-auction.

The subs loss is in line with the platform's estimates as the platform had estimated a paid subs base loss of 35-40 per cent of the total subscriber base. Multiple reasons like 1) IPL moving away from Hotstar, 2) Jio cinema offering a wide variety of content free, 3) Disney+ Hotstar offering the ICC cricket World Cup free, and 4) HBO content also moving away have been responsible for this decline. However, the platform believes the subs loss is now largely bottomed out and may see a stable subscriber base/marginal decline over the near term.

In terms of revenue impact, the potential revenue loss will remain in the range of 50 per cent-60 per cent as IPL was a large revenue contributor on AVOD. Losses for Disney+ Hotstar are expected to be much lower YoY, as it would have expanded sharply had it acquired digital rights at that hefty premium (Rs 240bn).

Pricing has remained stable y-o-y for Disney+ Hotstar and the platform doesn’t expect any respite in this too, as cricket (the key World Cup property) is available for free on Disney+ Hotstar, and the free content offering by Jio cinema will keep OTT industry ARPU's under check with little potential for growth over the medium term (as mentioned in the platform's report earlier).

The platform maintains its view that the India OTT market will report lower growth rates due to the arrest in SVOD revenue, on the back of premium content being offered free, which, in turn, will also delay its plans for the path towards profitability.

The credit for this article goes to Elara Capital Sr VP- research analyst (media, consumer discretionary & internet) Karan Taurani.