Rise & fall of Disney+ Hotstar: Why it is failing?

Hotstar, which has since become Disney+ Hotstar, reshaped the landscape of digital entertainment in India. It commenced as Hotstar and quickly found its place in the hearts of Indian viewers.

It commenced as Hotstar and quickly found its place in the hearts of Indian viewers. The platform’s wide variety of content, spanning from movies to sports to TV shows and more, is one of its standout features.

Key Metrics & Achievements	Figures & Notable Achievements
Introduction to Hotstar	- Launched in 2015 in India.
	- Known for its sports content.
	- Offered international content, including HBO shows.
Becoming Disney+ Hotstar	- Transformed into Disney+ Hotstar in 2020.
	- Added Disney's iconic shows and movies to its library.
	- Expanded its reach to Southeast Asian countries.
Hotstar's Global Reach	- Extended to countries like Indonesia, Malaysia, Thailand.
	- Catered to the global Indian community in places like Singapore, Canada, UK.
Hotstar Success Story	- Achieved 13 million viewers for a single match.
	- Experienced a 42% surge in subscribers from Oct 2021 to Oct 2022.
	- Exclusive streaming rights to the Indian Premier League (IPL).
	- Expected subscriber decline in Q1 FY23 due to loss of IPL rights.
Why it Failed: Fall of Hotstar	- Largest recorded subscriber drop of 12.5 million.
	- IPL loss resulted in a 24% reduction in paid members in six months.
	- Subscriber count peaked at 61.3 million at the close of 2022.
	- Competitors like JioCinema acquired HBO content and assets from NBC Universal.
	- Challenges in Marvel content lineup affected viewer interest.
	- Faced stiff competition from other streaming platforms.
	- Subscriber decline continued beyond expectations.
Future Uncertainty	- Disney exploring a sale of its India business.
	- Uncertain future in the competitive Indian streaming landscape.

The platform’s wide variety of content, spanning from movies to sports to TV shows and more, is one of its standout features.

But what truly made it exceptional was its willingness to embrace premium content from HBO, Showtime, and other esteemed providers.

With the surge in mobile internet usage, Hotstar experienced a meteoric rise. Then, in April 2020, it underwent a transformation and emerged as 'Disney+ Hotstar,' introducing not only Disney's cherished originals but also an extensive array of content from renowned Disney brands such as Pixar, Marvel, Lucasfilm, and National Geographic.

Today, Disney+ Hotstar's influence extends far beyond India, encompassing Southeast Asian nations like Indonesia, Malaysia, and Thailand, with plans for further expansion into Vietnam.

For the global Indian community residing in places like Singapore, Canada, and the UK, Hotstar caters to their entertainment and sports cravings.

Disney+ Hotstar's tale is one of triumph, adaptation, and staying ahead in the dynamic entertainment world. Hotstar has redefined the way we enjoy online content. With its wide variety of content, user-friendly interface, and smart tech, the platform has gone much above than just a streaming platform.

How Hotstar Became Disney+ Hotstar?

In 2015, a small and dedicated team set out on an exciting journey by launching a streaming service called Hotstar in India. Since then, it has just been the growth story.

The platform quickly became the go-to destination for viewers, thanks to its massive library of movies, TV shows, sports, and more.

Fast forward to 2020, a major transformation occurred. The entertainment giant Disney entered the scene and added a magical touch to Hotstar. This upgrade resulted in the birth of Disney+ Hotstar, making it even more appealing to users.

With the Disney+ infusion, viewers now had access not only to the best of Indian entertainment but also to Disney's iconic shows and movies. It was like turning an already delightful dish into a gourmet feast.

Disney+ Hotstar didn't limit its success to India alone; rather, it moved on to provide its services to countries like Malaysia, Indonesia, and Thailand.

However, there was a plot twist in 2021. Disney decided to bid farewell to the U.S. version of Hotstar, choosing instead to distribute its content through other services. The streaming landscape is ever-evolving, and change is its constant companion.

From its humble beginnings in 2015, Hotstar has transformed into Disney+ Hotstar, delivering exceptional entertainment to screens around the world. It's a tale of a small service that evolved into a global streaming sensation.

Hotstar Success Story : Rise of Hotstar

Hotstar quickly became a big deal in India because of its focus on sports. It all started during the 2015 Cricket World Cup. Cricket is huge in India, and it saw this as a golden opportunity.

Hotstar became the go-to place for cricket fans, especially when they got the rights to stream the Indian Premier League (IPL). In 2015, they had over 200 million viewers during the IPL. Every year, more and more people tune in.

But it wasn't just cricket. The platform also showed soccer (English Premier League) and Formula 1 racing for sports fans.

Hotstar didn't stop at sports; it also offered international content, like HBO shows. Game of Thrones, for example, was a big hit on Hotstar. Hotstar was ahead of competitors like Netflix and Amazon Prime because of its cool HBO content. Then, in 2020, it became Disney+ Hotstar and started showing Disney shows too. This made it even more popular.

Peak Revenue, Viewership & Valuation

Disney+ Hotstar reached its pinnacle with a remarkable viewership of 13 million for a single match, showcasing its dominance in the Indian streaming arena. Over the year from October 2021 to October 2022, it experienced a substantial 42% surge in subscribers, culminating in 61.3 million subscribers in Q4 FY22 compared to 43.3 million a year prior.

The success of Hotstar resulted from a number of movies and TV shows, but the jewel in this race was the exclusive streaming rights of the Indian Premier League (IPL), which contributed to the majority of revenue, viewership, and valuation of the firm.

IPL, a cricketing extravaganza, drew massive digital audiences, projected to touch 523 million viewers in FY23.

Nonetheless, a challenging phase loomed as Viacom18 outbid Hotstar for IPL rights from 2023 to 2027. Disney+ Hotstar expected a decline in subscribers in Q1 FY23 due to IPL's absence. IPL accounted for 60-65% of its viewership, and without new cricket rights, subscriber loss could be more pronounced.

Moreover, Hotstar grappled with a 9% drop in Average Revenue Per Paid Subscriber (ARPPS), attributed to advertising revenue decline and a higher number of wholesale subscribers.

Why it failed: Fall of Hotstar?

Disney+ Hotstar's fall from grace can be attributed to several key factors.

The downward spiral began when it lost the digital streaming rights for the Indian Premier League (IPL) in December of the previous year. Since then, their subscriber count has only plunged, which led to a 3 consecutive decline in the user base on a Q-o-Q basis.

The most recent quarter marked the largest drop ever recorded, with Disney+ Hotstar shedding a staggering 12.5 million subscribers. This trend can be traced back to the IPL loss, which resulted in a 24% reduction in paid members, plummeting from 52.9 million to 40.4 million in just six months. The platform had reached its pinnacle with 61.3 million subscribers at the close of 2022.

Adding to its woes, competitors like JioCinema made strategic content acquisitions, further eroding Disney+ Hotstar's unique offerings. JioCinema secured HBO's content slate and properties from NBC Universal, expanding its content library to cater to top-tier streaming subscribers.

Disney's once-differentiating Marvel content slate also faced challenges in its phase 4 lineup. However, experts suggest that the subscriber decline may stabilize in the near term, though not without a substantial revenue impact, expected to be between 50 to 60 percent.

Despite these challenges, Disney+ Hotstar's growth in premium subscribers is expected to remain limited. The wider availability of premium content across OTT platforms has constrained the growth of the subscription video-on-demand (SVOD) market. Even Disney+ Hotstar's offering of the ICC World Cup for free did not stem the tide of subscriber losses.

The decline in Disney+ Hotstar's performance coincides with The Walt Disney Company's reported exploration of a sale of its India business, which raises additional uncertainties about the future of Disney+ Hotstar in the highly competitive Indian streaming market.

Key reasons behind the fall of Hotstar

Loss of IPL Rights

The loss of digital streaming rights for the Indian Premier League (IPL) was the primary and most impactful reason for Hotstar's decline. IPL had been a significant draw for the platform, and its absence led to a sharp drop in subscribers and revenue.

Competitive Acquisitions

Rival platforms, particularly JioCinema, made strategic content acquisitions, including HBO's content slate and assets from NBC Universal. These acquisitions reduced Hotstar's unique content offerings and attracted viewers to competing platforms.

Challenges in Marvel Content

While Hotstar had differentiated itself with its Marvel content slate, challenges in the phase 4 lineup of Marvel shows resulted in diminishing viewer interest, further impacting its subscriber numbers.

Stiff Competition

The intense competition in the Indian streaming market, with players like Amazon Prime Video and Netflix, limited Hotstar's ability to grow its premium subscriber base. The availability of premium content for free on other platforms posed a challenge.

Delayed Stabilization

Hotstar's management had expected its subscriber base to stabilize in January-March 2023 after the IPL loss, but the decline continued beyond their projections. This prolonged instability negatively affected the platform's performance.