India believes in the power of cricket. The global market for content may turn on the cricket innings seen by streaming consumers in a Dynamic India. And the tale is told in turns for Jiminy Cricket.
The Walt Disney Company purchased 21st Century Fox in 2019 bringing the Asian Hotstar branded service into its offerings. The expansion of Disney+ streaming services expanded Hotstar services for India, and Indians in Singapore, Canada, and the UK. From a Disney+ subscriber high of 61.4M in October 2022 the Hotstar+ streaming base was down to 40.4M in June 2023. ARPU for the Indian subscribers average USD$0.59. Media analysts have viewed subscriber losses at Hotstar with negative comments.
The reason was IPL Cricket. 94% of the Indian sports broadcast media rights are for Cricket. Cricket sees a higher importance as a national sport than the Sumo matches in Japan or the NFL in the USA.
Industry watchers have looked to the subscriber counts and reported profitability of streaming services with quarterly scoring. Some commentators were unhappy with Disney’s returning CEO comments seeming to offer up India’s Hotstar service as a market not to get high investment.
Disney did not invest to buy up Indian Premier League Cricket streaming media rights in 2022 that went for Rp48,390 crore. Hotstar had purchased the rights in 2015 (Rp17,346 crore, USD$2.1B, of which Rp 3,900 crore was streaming) launching with the 2015 Cricket World Cup and the 2015 Indian Premier League series. At a peak with the India-New Zealand 2019 Cricket World Cup there were 25.3M concurrent steaming viewers. In 2023 JIO reported a peak of more than 32M concurrent viewers. Disney split the ICC Cricket media rights with Zee Entertainment. (Zee is now merging with the Sony India media unit.) Disney did bid and keep the broadband streaming media rights and expanded its marketshare in 2023 Indian Premier League viewership. EkaLore has previously looked at the financial returns for Cricket media rights.
Global content investment by streaming enterprises is more constrained now that profitability and consumer take-up is settling in major markets. Consolidation via mergers, takeovers, and collaborations will place limits on expensive live content even as costs increase for all other productions. Disney’s willingness to forego investment in streaming IPL Cricket rights will allow greater other investments on the way to streaming profitability. Disney sees investment on an overall global basis for potential revenues and margins.
Disney is looking at a larger picture. Investment has shifted even as Disney ESPN is remodeled to match business model and advertising changes. Disney is likely looking at global streaming markets and its ability to achieve profitability including subscriber growth and content investments. In the next few years Indian consumers will know where Cricket can be found and other content will become of higher importance to gaining (or keeping) subscribers.
The importance of Cricket to Indian consumer subscriptions is likely larger than NFL subscriptions were in the USA market. AT&T’s DirecTV bet on NFL games keeping subscribers (even as OTT streaming) turned out to be misplaced. Amazon’s willingness to invest for NCAAF football rights was less than estimated. The bet by JIO, and partners, on IPL Cricket rights may be more durable as a way to gain 20M+ subscribers to multiple revenue streams (into a larger total base). We’ll give a little whistle and watch.
For more analysis and notes on a Dynamic India see http://www.ekalore.com/india-business
Comments