Disney bets on free cricket to win the India streaming war by turning the tables. By providing free cricket on smartphones, Walt Disney (DIS.N) hopes to turn around the fortunes of its streaming business in India. The company is betting that this move will increase advertising revenue and lessen the effects of a subscriber exodus.
For the year ending in March 2022, the India streaming operations, which by number of users were Disney’s largest worldwide the previous year, reported a loss of $41.5 million on revenue of $390 million.
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The Burbank-based entertainment giant’s financial performance in the nation is only anticipated to get worse as subscriber exits quicken and reduce the user base by a third between October of last year and July.
Disney’s struggles serve as a cautionary tale for the Indian market, where consumers’ extreme cost-consciousness frequently frustrates expectations of a growing middle class.
When the company paid $71 billion for some of 21st Century Fox’s global assets in 2019, it also acquired the Indian streaming service Hotstar. With the Indian Premier League (IPL), the richest cricket league in the world, streaming rights secured, Disney turned cricket on Hotstar into a paid service in 2020 and predicted it would attract up to 100 million users within a few years.
However, Indian tycoon Mukesh Ambani stole the IPL’s rights last year with a $2.9 billion bid and then streamed matches for free. From 61 million users in October, only about 21 million remained by July, and Disney subscribers quickly left.
According to two Disney sources who spoke to Reuters, Disney internally acknowledges that it underestimated Indians’ willingness to pay – people signed up for Hotstar when it had the IPL but left without purchasing additional premium plans to watch other content.
“We had high hopes for Indian subscribers’ willingness to pay. That didn’t work out, according to one of the sources. The last shot is “free cricket.”
