Disney+ loses 4.6 million users as JioCinema’s free IPL streaming hurts

India’s over the top digital streaming service Disney+ Hotstar has lost 4.6 million, or 46 lakh subscribers, in the fourth quarter of FY23, according to CLSA Ltd.

The sharp subscriber decline to 52.9 million, or 5.29 crore, comes after the last quarter decline of 3.8 million, or 38 lakh, subscribers and from a peak of 61.3 million, or 6.13 crore, subscribers in Q2 FY23, CLSA said in a May 11 note.

The latest loss of subscribers has been accompanied with a big fall in average revenue per user to $0.59, or Rs 48, from $0.74, or Rs 60, in the previous quarter, CLSA said. ARPU fall has been led by lower per subscriber advertising revenue.

“We believe Disney+ Hotstar subscriber loss and ARPU fall have been caused due to loss of Indian Premier League digital rights starting 2023,” the note said.

Currently, the five-year media rights for Indian Premier League, starting from 2023, are split between Disney Star and Viacom18, which is owned by Reliance Industries Ltd.

During the previous five years, Disney Star was the sole owner of TV and digital rights of the Indian Premier League.

For the ongoing season, Viacom 18 has offered viewing of the IPL for free on JioCinema, not just impacting the Disney+ Hotstar subscribers, but also the ARPU, the note said.

“Disney Star and Viacom18 battle to monetise IPL rights will escalate over the next four years, as both have paid $3 billion each and their rights payments will jump from 2025,” the note said.

According to CLSA, Disney Star had won TV rights for IPL for $3.1 billion at 30% above reserve, while Viacom 18 won the rights for $2.7 billion, 68% above reserve price.

Zee’s OTT platform ZEE5’s monthly users have risen 18 million, or 1.8 crore, in 12 months to 120 million, or 12 crore. Content on the platform is led by Hindi and regional language entertainment shows and movies.

“The Zee Sony merger is ahead and ZEE5 will likely gain from improved competitive landscape in OTT, especially as the merged company will have nearly $2 billion in cash,” the note said. Bloomberg