Disney “wants to stay” in India and is considering its options in the world’s most populous country even as crown jewel Hotstar struggles to contain the loss of subscribers, Bob Iger said on Wednesday.
Hotstar lost 2.8 million subscribers in the quarter ended September, widening its overall loss to about 23 million in one year. Hotstar now has 37.6 million subscribers.
The ray of hope for Disney is that next quarter the company is likely to announce a jump in subscribers – and perhaps announce 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 follow the ongoing ICC Cricket World Cup. The company is also close to signing a deal with Reliance to sell its business in India, according to Bloomberg.
Disney’s largest business in India is the portfolio of dozens of cable TV channels it owns in the country. “Our linear business is doing really well, it’s making money,” Iger, who returned to Disney as its CEO late last year, said on the earnings call.
“But we know that other parts of this business have challenges for us and for others. “We’re looking, I’ll call it broadly,” he added.
Reliance-backed Viacom18 has spent more than $3 billion on the cricket rights to a domestic, but hugely popular, cricket tournament, disrupting the Indian live streaming on-demand market.
India has emerged as a major market for global technology and entertainment giants in the last decade. But despite its ability to attract a large user base for online services, the country is seeing a relatively small portion of those users convert into paying customers.
“A few years ago, when we asked the international head of a large TV network company about the company’s performance in India, the CEO let out a long sigh and said that the Indian company somehow finds a way to break his heart every year.” Moffett-Nathanson wrote in a report.
“We also learned this firsthand during our time covering several iterations of Fox/News Corp (FOXA, OP), which owns Star TV India. Despite promises to reach $1 billion in EBITDA by 2020 However, the division has always been a woeful failure due to the constant need to reinvest in major cricket rights or develop mobile platforms.