In a shocking turn of events, Disney+ Hotstar, a prominent player in the Indian digital streaming landscape, is now considering selling its business. This decision follows critical setbacks, including the loss of IPL digital rights and the BCCI Media Rights deal. In this comprehensive article, we will delve into the current predicament, potential suitors, and the myriad challenges that Disney-Star faces in its endeavor to sell Hotstar.
The Bleeding Subscribers
Disney+ Hotstar has been experiencing a dramatic exodus of subscribers since its failure to secure the highly coveted IPL rights. The platform’s subscriber base has reportedly dwindled by over 20 million, a significant decline directly attributable to this loss. To compound their troubles, the failure to renew the HBO content deal further eroded their content library and appeal.
The BCCI Media Rights Miss
Adding salt to the wound, Disney-Star suffered a significant setback by missing out on the BCCI Media Rights. Consequently, cricket enthusiasts will no longer find India cricket matches on the platform, as these rights have been snapped up by Viacom18. Interestingly, Disney-Star did not even participate in the e-auction for these rights, signaling a missed opportunity.
Potential Suitor: Reliance Industries
Intriguingly, Disney has initiated preliminary talks with Reliance Industries, a formidable conglomerate led by Mukesh Ambani, known for his strategic prowess in acquisitions. The fact that Reliance outmaneuvered Disney in securing both IPL and India cricket rights suggests a robust interest in the Indian sports media landscape.
Disney-Star’s Sports Portfolio
Notwithstanding the loss of IPL and India cricket matches, Disney+ Hotstar still boasts an impressive sports portfolio. This includes rights to ICC events, the Big Bash League, and all Australia cricket home matches. Additionally, the platform recently delivered a resounding success with the Asia Cup 2023, attracting over 2 crore viewers.
The Potential Gamechanger: Viacom18 Merger
While Disney-Star remains tight-lipped about ongoing negotiations, the prospect of a merger with Viacom18 looms large. However, such a union would not be without its share of challenges. The digital business is showing signs of decline, and the company is burdened with a staggering $4 billion worth of sports rights liabilities. These factors could pose significant obstacles to any potential deal, as reported by The Economic Times.
Hotstar’s Expensive Asset
Hotstar is undeniably a high-value asset. With existing sports and entertainment deals firmly in place, acquiring it would be a substantial financial commitment. Reliance-backed Viacom18 might be among the select few entities capable of shouldering this financial burden should they decide to proceed.
The fate of Disney+ Hotstar hangs in the balance as discussions with Reliance and other potential suitors evolve. Despite enduring substantial setbacks, the platform retains valuable assets within its sports content portfolio. Whether it remains under the Disney-Star umbrella or changes ownership, the future of Hotstar will be a closely watched narrative in the forthcoming months.
Hotstar’s Inception
Hotstar, the Indian digital streaming giant, officially made its debut on 11th February 2015. This launch was strategically timed to coincide with the 2015 Cricket World Cup and the imminent 2015 Indian Premier League (IPL), for which Star had secured streaming rights. At its inception, the ad-supported platform boasted a library of over 35,000 hours of content in seven regional languages. Additionally, it offered live streaming coverage of sports like football, kabaddi, and cricket with a slight delay.
A Vision for Quality Content
Sanjay Gupta, CEO of Star, envisioned Hotstar as a platform that would fill a void in the Indian market. He believed there weren’t many platforms offering high-quality curated content apart from YouTube. Hotstar was designed to cater to the growing young adult demographic, with “very targeted” advertising. Gupta estimated that by 2020, Hotstar could contribute to nearly a quarter of Star’s annual revenue.
Early Success and Growth
Hotstar enjoyed early success, garnering at least 345 million views during the 2015 Cricket World Cup and over 200 million views during the 2015 IPL season. In April 2016, it introduced a subscription tier focused on international and premium sports content. Around the same time, it struck a deal to carry uncut HBO content, perfectly timed with the premiere of Game of Thrones Season 6.
Mobile Broadband Boost
The launch of the LTE-only wireless carrier Jio in 2016 transformed India’s mobile broadband landscape, propelling the growth of streaming video in the country. While international services like Amazon Prime Video and Netflix made some headway, Hotstar remained the dominant streaming platform. By July 2017, Hotstar’s apps had been downloaded 300 million times, establishing it as the top video streaming app in India.
Rising User Base
By May 2018, Hotstar boasted an impressive 75–100 million active users per month. However, in September 2018, CEO Ajit Mohan left to head Facebook India, signaling changes within the organization. Hotstar restructured its leadership and received new funding from Star US Holdings to enhance its production of premium original content, aiming to compete more effectively with Amazon and Netflix.
Disney’s Acquisition and Integration
In 2019, The Walt Disney Company acquired Star India and Hotstar as part of its purchase of 21st Century Fox. This marked a significant turning point for Hotstar.
Integration with Disney+
In February 2020, Disney announced the integration of its international streaming brand, Disney+, and its original programming into Hotstar. This re-launch was initially planned to coincide with the 2020 Indian Premier League but was delayed due to the COVID-19 pandemic. The expanded service officially launched on 3rd April 2020.
Global Expansion and Branding
Disney extended the Disney+ Hotstar service to other territories, starting with Indonesia in August 2020. Additionally, the company introduced the “Star” brand for general entertainment streaming services in markets outside the United States, akin to Disney’s U.S. streaming service Hulu. In Latin America, Disney introduced “Star+” as a separate service featuring ESPN content.
Recent Developments
In February 2023, Disney reported a net loss of 2.4 million subscribers for Disney+, attributed in part to losing streaming rights for the IPL in India to Viacom18. The removal of HBO original programming from Hotstar was also announced, possibly related to Disney’s cost-cutting efforts. In response to JioCinema’s decision to stream the 2023 IPL for free, Disney+ Hotstar announced it would stream the 2023 Asia Cup and 2023 Cricket World Cup for free on mobile devices in June 2023.
Hotstar’s journey from inception to integration with Disney+ reflects its remarkable growth and adaptation in the ever-evolving landscape of digital streaming.
