Without HBO and IPL, 15 million subscribers could flee Disney+ Hotstar in 2023

• Starting March 31, Disney+ Hotstar subscribers will no longer be able to stream popular HBO shows like Game of Thrones, Succession, The Last of Us, among several others.
  
• This is the second major setback for Disney+ Hotstar which lost IPL streaming rights to Mukesh Ambani-led Viacom18.
  
• Outraged users are already demanding refunds, with some of them saying they won’t renew their subscriptions.
  
• Missing out on IPL first, and HBO content now leaving the platform could result in a loss of 15 million subscribers, according to Elara Capital’s Karan Taurani.
  

Bob Iger’s $5.5 billion cost-cutting plan could result in Disney+ Hotstar losing over a quarter of its subscribers in 2023. The loss of the eyeball-grabbing Indian Premier League (IPL), and now losing HBO content could lead to subscribers fleeing the streaming service in droves.

Disney+ Hotstar, which was earlier just Hotstar in India, will lose access to HBO content starting March 31. Star India had partnered with HBO back in 2015, giving Hotstar users access to shows like Game of Thrones, Succession, The Wire and more recently, The Last of Us, among several others.

All of that will soon go away, though, causing plenty of heartburn among subscribers.

"Starting March 31, HBO content will be unavailable on Disney+ Hotstar. You can continue enjoying Disney+ Hotstar's vast library of content spanning over 100,000 hours of TV shows and movies in 10 languages and coverage of major global sporting events," Disney+ Hotstar said on its official social media account.

Second major setback for Disney+ Hotstar

This is the second major setback for Disney+ Hotstar – the first one was losing IPL streaming rights to Mukesh Ambani’s Viacom18. The impact of losing IPL rights was immediately visible in Disney+ Hotstar’s subscriber base. The platform lost 3.8 million subscribers in the December quarter, bringing down the total paying customers to 57.5 million.

“We believe the above will have a significant negative impact on paid subscribers for Hotstar India; we maintain that the loss of subscribers will continue to happen towards June 2023 quarter due to IPL,” said Karan Taurani, senior vice president, Elara Capital.

With HBO also leaving the platform, Disney+ Hotstar could see over a quarter of its subscribers fleeing.

“In terms of the recent HBO content moving out of Hotstar, we estimate the subscriber loss moving towards the upper end (around 25-30% in total), of the 61.5 million subscribers at peak,” Taurani added.

This would bring Disney+ Hotstar’s subscriber base in the 43-46 million range by the end of 2023. However, Taurani says that the existing library of TV content from Star, the upcoming T20 World Cup and the lucrative Star Wars, Marvel and Pixel franchises would offer some respite.

Outraged subscribers

The removal of HBO content from its platform outraged subscribers, who took to social media to vent their frustration.

HBO’s content library includes some very famous titles like Game of Thrones, The Last of Us, Succession, The Wire among others. With these shows going away, users vented their frustration, with some of them clearly unhappy about having to watch Indian soap operas.

While some users demanded a refund, others said they won’t renew their subscriptions.

Here are the HBO shows leaving Disney+ Hotstar:

Apple, Amazon and now Reliance – Disney’s mounting troubles

While creating shows and movies and other content is the bread and butter of companies like Disney and Netflix, players like Apple and Amazon have been pumping money into their streaming services, Apple TV+ and Prime Video, respectively, using them as loss leaders to prop up their primary businesses.

But for a company like Disney whose primary business is content, eating losses is not feasible in the long-term. It’s why the company brought back Bob Iger from retirement and asked him to course-correct – Iger’s first action was to lay out a $5.5 billion cost-cutting plan.

While Disney lost IPL to Reliance’s Viacom18 before Iger was brought back, it did not really make much from its subscribers in India – according to the company’s December 2022 quarter results, Disney+ Hotstar subscribers contributed $0.74 per user per month on average, significantly lower than the $5.95 contribution from Disney+ subscribers in the US and Canada.

The Disney+ Hotstar service is available only in India, Indonesia, Malaysia and Thailand.

Netflix, which is far more expensive than Disney+ Hotstar in India, reported an average revenue per member of $7.69 in the Asia Pacific region. This is after a 25% reduction in its subscription prices, which now start from as low as ₹149 per month for the most basic plan, translating to ₹1,788 per year.

Netflix’ top-tier plan costs ₹7,788 per year. In contrast, the most expensive Disney+ Hotstar plan costs ₹1,499 per year. Essentially, Disney+ Hotstar’s most premium plan is still cheaper than Netflix’ most basic plan.

On the other hand, Viacom18, which bagged the lucrative IPL streaming rights for ₹23,758 crore, will provide 4K streaming for free via the JioCinema app.

The way forward for Disney+ Hotstar is aggressive investments in creating original content, according to Taurani. However, it needs to click with subscribers who were so far used to HBO’s popular catalogue.

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