Bob Iger said on Wednesday that Disney “would like to stay” in India and is considering its options in the world’s most populous country where its TV business continues to turn a profit but Hotstar is struggling to stem subscriber losses.
Hotstar lost 2.8 million subscribers in the quarter ended September, widening its total loss to about 23 million in a year as the company continues to attract more consumers to Disney+. Disney+ added nearly 7 million subscribers in the quarter, taking its total subscriber base to over 150 million globally, including those from Hotstar.
The glimmer of hope for Disney is that next quarter the company is likely to report growth in Hotstar’s subscriber base, which currently stands at 37.6 million subscribers – and potentially have a new partner in India.
Hotstar has regained many subscribers and attracted tens of millions of non-paying users back to the platform as they watch the ongoing ICC Cricket World Cup. The company is also close to signing a deal with Reliance to sell its Indian business, according to Bloomberg, as it tries to cut losses.
Iger told analysts on Wednesday that the company plans to cut costs by $2 billion more than previously planned as the company trims losses in the streaming business. Disney has predicted streaming profitability in about a year.
Disney’s biggest business in India is its portfolio of a few dozen cable TV channels it owns in the country. “Our linear business is doing very well, it’s making money,” Iger, who returned to Disney as CEO late last year, said on the earnings call.
“But we know that other parts of this business are challenging for us and others. And we are looking, I will say extensively,” he added. “There we are looking at our options. We have the opportunity to strengthen our hand.”
Reliance-backed Viacom18 spending more than $3 billion on cricket rights for a local, but wildly popular, cricket tournament has disrupted the Indian on-demand streaming market.
India has emerged as a key market for global tech and entertainment giants over the past decade. However, despite its ability to attract a large user base for online services, the country sees a relatively small portion of those users convert into paying customers.
“A few years ago, when we asked the international head of a major TV network business about the company’s performance in India, the executive let out a long sigh and said that the Indian business somehow finds a way to break his heart every year.” . MoffettNathanson wrote in a report.
“We also learned this firsthand during our time covering the many iterations of Fox/News Corp (FOXA, OP), which owns Star TV India. Despite promises to reach $1 billion in EBITDA by 2020, the segment has always fallen woefully short due to the constant need to reinvest in core cricket rights or mobile platform development.”
