Hotstar’s losses widen by 66% in FY21

Novi Digital Entertainment Private Limited that runs the popular online video streaming platform Hotstar, now a part of Walt Disney India, reported a net loss of ₹601 crore for FY2020-21 against a loss of ₹361.8 crore in the previous fiscal year, according to data accessed by business intelligence platform Tofler.

Revenue for the year stood at ₹1,704 crore, a 5% jump compared to last year, while total expenses for the fiscal were reported as ₹2,305 crore.

The company’s ad revenue declined 15% to ₹829.74 crore from ₹974.23 crore. Subscription revenue, on the other hand, saw a 34% increase to ₹830.96 crore as compared to ₹618.79 crore.

Hotstar did not respond to Mint’s queries on possible reasons for the losses widening in FY21.

Media industry analysts said some of the losses may be attributed to slow content flow during the pandemic besides the underwhelming performance of some of the big-ticket Bollywood films it spent money on last year for direct-to-digital releases. Last June, Hotstar had announced the OTT premiere of Akshay Kumar’s Laxmii, Ajay Devgn’s Bhuj: The Pride of India, Alia Bhatt-starrer Sadak 2, Abhishek Bachchan’s The Big Bull and other titles in what was estimated to be a ₹400 crore deal. This year, it has premiered Hindi films such as Hungama 2, Bhoot Police along with regional language titles as theatres remained shut, preventing the release of several movies.

“People don’t really come on board for one film. They need compelling content which should be a mix of sports and original web shows,” said Karan Taurani, senior vice-president, Elara Capital Ltd, calling the film acquisition cost, large additional investment.

To be sure, the Disney-owned service is making clear efforts to penetrate deeper into the country. This July, Hotstar had announced a mobile-only plan for Rs. 499 per year, for Rs. 899 per year across two devices and for Rs. 1,499 per year across four devices.

The video-on-demand platform was earlier priced at Rs. 399 per annum for its VIP service and Rs. 1,499 for Premium. It became the third foreign service to introduce a mobile-only plan for India after Netflix which launched a mobile subscription priced at Rs. 199 per month in 2019, and Amazon Prime Video whose membership can be accessed by Airtel pre-paid customers starting at Rs. 89 a month.

Moreover, Disney+ content, including English-language originals and Hollywood movies such as those from the Marvel Cinematic Universe, that were earlier only available in their dubbed form for VIP customers, can now be accessed in their original format by all paid subscribers of Hotstar, the company had said.

In an earnings call in August, Disney said Hotstar made up nearly 40% of the overall Disney+ subscriber base at the end of the April to June quarter. Disney+ reported 116 million paid subscribers globally. LiveMint