Disney+ Hotstar Tailors Offerings to Match Low Bandwidth In India: Disney CEO

Published by
Bala Yogesh


The Walt Disney Company, a diversified international family entertainment and media enterprise, will “focus down on Hotstar, both from an entertainment standpoint and a sports standpoint,” says Bob Chapek, the company’s chief executive officer. Chapek on Monday said in the annual Credit Suisse Communications Conference that the choice made by the company to target sports and entertainment for Hotstar is due to its “benefits in those regions.” The Walt Disney CEO also said that the company is set to focus on “some local content and really double down” in its international markets. In recent months, the Walt Disney Company has been vocal about the significance of local content and sports especially cricket on its platforms.

Disney+ Hotstar Accounts for Third of Total Disney+ User Base

Christine McCarthy, the chief financial officer at the Walt Disney Company in the second quarter earnings call in early May said the “Disney+ Hotstar

was the strongest contributor” to its net user additions. Further, McCarthy said that the Disney+ Hotstar made up “approximately a third of the total Disney+ subscriber base as of the end of the second quarter.”

Crucially, McCarthy said that the average revenue per user (ARPU) at Disney+ Hotstar in the second quarter was “down significantly” due to “lower advertising revenue as a result” of the Indian Premier League (IPL) matches timing.

“The other thing that’s going to happen here is with the absence of the IPL games in India, that will also have an impact on advertising revenue,” McCarthy said in the second quarter earnings call. “So you could see a decrease in the ARPU and the subs in India, if that plays out.”

Disney+ Hotstar, the over-the-top (OTT) streaming platform run by Walt Disney owned Star India currently holds the broadcast rights for the domestic and the international cricket matches held in India till 2023.

In November 2020, Star India in a release announced that it has bagged the broadcast rights of Cricket South Africa till 2024. Additionally, the company in the release highlighted that it also holds the rights for the International Cricket Council (ICC) events.

It also has to be noted that ICC on Tuesday said that the Disney+ Hotstar will stream the inaugural ICC World Test Championship final across multiple countries including India,

the US, Canada and Singapore. The World Test Championship final match between India and New Zealand is currently underway with the five day match ending June 22, 2021 is also being telecasted across multiple Star Sports channels in India.

In late May, Chapek said in the annual JP Morgan Global Technology, Media and Communications Conference that the company understands the “one-size-fits-all strategy” does not “necessarily work everywhere.” Chapek said that the company has “different distribution mechanisms across the world” and that Disney+ is “successful” as it is “very sensitive to the local market needs and not doing a one-size-fits-all” strategy.

“That said, maybe the most unique market of all would be Southeast Asia and particularly India given the strong affinity towards cricket and the mobile-first, the low bandwidth, all those things that we mentioned and that local language customization is absolutely critical,” Chapek said.

India An “Unique Market” Says Disney CEO

The Walt Disney CEO in the annual JP Morgan Global Technology, Media and Communications Conference also said that Hotstar has an “unparallel collection of entertainment and sports” that the company is “really proud of.”

“[India] really is a unique market, unique because we have particularly what I’ll call mass market pricing and distribution, but it’s a unique market in terms of that distribution because it’s really a mobile first market, which is kind of unusual,” Chapek said.

Further, Chapek said that India has a “low bandwidth” and that the company has to “tailor” its offerings to “match that low bandwidth” and that the “local languages are particularly important there.”

“So we have to sort of customize for each of those unique elements, but we think that our premium programming evidenced by the sports I referenced especially things like cricket, and that local content, we have, I think 17,000 hours a year of local content that we create for Hotstar and I think that really drives our local affinity,” Chapek said.

Meanwhile, Variety, an entertainment publication on Thursday citing a study by Media Partners Asia said that Disney+ user growth in India is “anchored to premium cricket rights.” Further, it was highlighted that the streaming platform needs to enhance its local content and that “IPL continues to drive revenues and yields, but inventory utilization on entertainment is low.”

Bala Yogesh

Born in India, Yogesh loves to travel and has lived in multiple countries including New Zealand and Canada. His bylines can be found on various newspapers and blogs throughout the world, including Vancouver Sun, Surrey Now-Leader, Daily Hive , Investing News Network and Rach F1.

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