The Disney-owned video streaming service lost 4.6 million paid subscribers during the second quarter that ended on April 1, 2023, signaling the second consecutive quarterly decline.
This is the largest quarterly subscriber decline for Disney+ Hotstar since the media and entertainment conglomerate began disclosing the service’s paid member base in April 2020, surpassing the previous quarter’s 3.8 million paid member decline.
The number of paid Disney+ Hotstar members decreased to 52.9 million during the quarter, a decline of 8 percent from the previous quarter’s 57.5 million paid members.
Disney+ Hotstar’s quarterly subscriber drop was its largest
The decline in subscribers occurs at a time when the country’s dominant streaming service no longer has access to key content offerings that were crucial to its initial growth in India: streaming rights for the Indian Premier League and premium HBO content.
Last month, Warner Bros. Discovery and Viacom18 entered into an exclusive content partnership, making JioCinema the new home for HBO, Max Original, and Warner Bros. content in India.
JioCinema will debut these television series on the same day as the United States. JioCinema will also offer the Warner Bros. film library, which includes the Harry Potter, Lord of the Rings, and DC Universe films, as well as forthcoming films and children’s animation titles such as Dexter’s Laboratory and Tom and Jerry Kids.
In addition, Disney lost the streaming rights for the IPL tournament from 2023 to 2027 to Viacom18 in 2018, causing the company to reduce its subscriber goal for Disney+ Hotstar in August 2022.
Hotstar’s paid member decline also dragged down the total paid subscriber base of Disney+ by 4 million for the quarter, marking the second consecutive quarterly subscriber decline for Disney’s flagship streaming service.
Disney+ Hotstar accounted for approximately 33.5% of the total paid subscriber base for the quarter, which stood at 157.8 million, a decrease of 2% from the previous quarter’s 161.8 million subscribers.
Currently, Disney+ Hotstar is available in India and select Southeast Asian markets, including Indonesia, Malaysia, and Thailand, although the majority of subscribers are from India.
Falling APRM
Due to decreased advertising revenue per subscriber, Disney+ Hotstar’s average monthly revenue per paid subscriber decreased to $0.59 for the quarter, down 20 percent from $0.74 in the previous quarter.
Due to a recent fee increase, Disney+ earned an average of $7.14 per month in the United States and Canada, up 20 percent from the previous quarter. International customers, excluding Disney+Hotstar, generated an average of $5.93 per month in revenue during the quarter, a 6 percent increase from the previous quarter.
This quarter, Disney+ earned an average of $4.44 per customer; however, if Disney+ Hotstar is excluded, the ARPU increases to $6.47 per month.
Reduce transmission loss
Losses at Disney’s direct-to-consumer (DTC) segment, which includes all of its streaming services, decreased from $887 million to $659 million for the quarter. This was due to the enhanced performance of Disney+ and ESPN+, partially offset by Hulu’s declining operating income.
Meanwhile, quarterly revenue increased by 12 percent to $5.5 billion from $4.9 billion in the prior year’s same quarter.
The media conglomerate intends for Disney+ to be profitable by fiscal year 2024. In February, CEO Bob Iger announced the company’s intention to reduce $5.5 billion in costs, including approximately $3 billion in non-sports-related content and $2.5 billion in costs unrelated to content. Additionally, Disney lay off approximately 7,000 employees, or approximately 3.6% of its global workforce.
During the company’s earnings call on May 10, Iger stated that the company intends to reduce the amount of content it produces and the amount of money it spends on content production, as well as to continue adjusting its investments for specific markets.
Disney also plans to offer Hulu content via Disney+ as a “one-app experience” to U.S. subscribers by the end of the year, a move Iger described as a “logical progression” for the company’s DTC offerings that will provide “greater opportunities for advertisers”.
It also intends to increase the cost of its advertising tier on Disney+ and expand the service to Europe by the end of the year.
At the end of the quarter, the entertainment conglomerate had approximately 231,3 million subscribers across its streaming services Disney+, ESPN+, and Hulu.
