Disney+ could lose 20 million subscribers after IPL digital rights transfer

Walt Disney Co. could lose up to 20 million of his Disney+ subscribers after he was outbid this week for the rights to broadcast Indian Premier League cricket matches.

Media Partners Asia estimates that the company may have trouble meeting its goal of reaching 260 million Disney+ subscribers worldwide by 2024, according to Vivek Kouto, chief executive of the research firm.

“IPL drives customer acquisition,” he said in an email. “Indian households – women and men – see it as entertainment and not just a sport.”

Few consumer products have been as successful as Disney+. The service, which offers unlimited Disney movies and TV shows, reached 10 million subscribers on the first day of November 2019 and had almost 138 million at last count. CEO Bob Chapek made a bold prediction at the end of 2020, predicting that the company would triple its subscriber count in four years.

About 50 million, or more than one-third, of subscribers worldwide are on Disney+ Hotstar, a product offered in India and other South Asian countries, and cricket has been a big driving force behind this.

For months, investors have debated whether the company would have to cut its outlook. The drum roll began after a weak quarter last year and continued after Netflix Inc. reported its first loss of subscribers in a decade in April. Disney shares are down 39% this year.

Disney lost a cricket bidding war to a group that includes Paramount Global and


IPL media rights: BCCI confirms record deals with Star, Viacom18 and Times Internet; the total cost reaches 48,390 rupees.

The Board of Control for Cricket in India (BCCI) has confirmed the climax of the record-breaking electronic media rights auction for the Indian Premier League for the 2023-27 cycle. In transactions worth Rs. 48,390.52 kr; Star Sports, Viacom 18 and Times Internet were big winners.

While Disney lost the streaming rights, it retained broadcast rights on traditional television networks, agreeing to pay nearly $3 billion over five years to stream the games. The company has about 70 channels in India distributed by cable and satellite TV operators. In a statement on Tuesday, Disney said it could still use these traditional channels to promote Disney+ Hotstar.

“We made disciplined bids with a focus on long-term value,” the company said.

Disney+ Hotstar subscribers pay an average of just 76 cents per month for the service, compared to the standard US fee of about $8 per month for Disney+. That’s less than $500 million in annual revenue, making it hard to justify the high annual income. IPL rights fees.

In February, Chapek said he doesn’t see the loss of cricket broadcast rights affecting Disney+’s long-term outlook as the company has other content to offer to Indian subscribers. “We won’t see this business evaporate if we don’t get it,” he said.

Some analysts see an opportunity for the company to change its forecasts due to the cricket loss.

“It’s important for Disney to use the IPL to reset expectations in a more manageable range,” Barclays analyst Kannan Venkateshwar wrote in a research note on Tuesday. He wrote that the lower forecast may not have much of an impact on stocks at this point because investors are already factoring in that possibility.

On Tuesday, Disney did not comment on its subscriber count projections. This usually happens during quarterly earnings reports and other investor events.