In a move that reflects the dynamic nature of the streaming industry, Disney has announced another round of price hikes for its online streaming services. The company’s decision comes as it faces a decline in its subscriber base, especially in its India-focused streaming platform, Disney+ Hotstar. This marks the second price increase within a year, with the new tariffs set to take effect from October 12th.
Disney+ Hotstar, once a standout player in the streaming market, saw a significant dip in its subscriber count. The platform lost approximately 12.5 million paid subscribers in the last quarter, taking its total paid subscriber base down to 40.4 million from the previous 52.9 million. This decline was primarily attributed to the loss of digital rights to stream the highly popular Indian Premier League (IPL) cricket tournament. With the absence of this major sporting event, Disney+ Hotstar struggled to retain its audience.
The loss of IPL rights was a pivotal moment for Disney+ Hotstar, as it allowed new entrants into the market. Mukesh Ambani’s Reliance Industries-backed JioCinema capitalized on this opportunity by offering IPL streaming for free, attracting a massive viewership. The move disrupted Disney’s hold on the market and contributed to the decline in Disney+ Hotstar’s subscriber base, highlighting the challenge of competing with a local champion offering cut-rate or free services.
Disney CEO Bob Iger addressed the subscriber drop during an earnings call, indicating that the Hotstar situation wasn’t a substantial factor in the company’s overall Direct-to-Consumer (D2C) financial results. Iger further emphasized the company’s strategic options for its portfolio of TV networks and its expansion of ad-supported services in various regions, including Canada and Europe.
To counter its declining subscriber base, Disney is introducing new pricing tiers. The company will offer an ad-free bundle of Disney+ and Hulu for $19.99 per month, while ad-supported versions of both services will remain at $7.99 per month. This move aims to cater to different customer preferences and potentially mitigate some of the losses.
Despite the setbacks, Disney remains focused on its broader streaming strategy. The company’s revenue grew by 4 per cent year-on-year to $22.33 billion, although falling short of Wall Street’s expectations. Moreover, Disney announced a $2 billion deal with Penn Entertainment to rebrand its sportsbook to ESPN Bet, highlighting its efforts to tap into the sports betting market. Iger also hinted at taking the ESPN flagship channels directly to consumers, acknowledging the ongoing shift in viewer preferences towards digital platforms.
As Disney grapples with subscriber losses and intensifying competition, especially in the Indian market, the company’s next steps remain crucial. The decline in Disney+ Hotstar‘s subscriber base is emblematic of the challenges streaming platforms face when key content rights shift hands.
Disney’s recent decision to raise prices for its streaming services comes as the company addresses declining subscriber numbers, notably in its India-focused platform, Disney+ Hotstar. The loss of the IPL cricket tournament’s digital rights and increased competition have contributed to the decline. As Disney explores strategic options and pricing changes, it remains to be seen how the company will adapt to this changing landscape and continue its expansion in the streaming industry.