Despite some promising content lined up for the second half of 2023, including the Asia Cup and the ICC fifty-over World Cup, Disney+ Hotstar is facing rising headwinds with the potential loss of close to 15 million paying subscribers by the end of 2023.
According to the report by Media Partners Asia (MPA), Disney+ Hotstar is also losing ground. The absence of IPL, the termination of its partnership with Jio, constrained entertainment budgets, and its recent discontinuation of marquee HBO content will all significantly diminish value for its subscribers.
Given the scenario, Star India is also likely to scale down its investments due to the growing challenges associated with the revenue and cost economics of linear TV for sports.
MPA has estimated the advertising revenues of IPL 2023 to be around $550 million, out of which the report says that Jio Cinema’s share will range between $330 million to $350 million, and the remaining $220 million will go to Star Sports.
The IPL’s media rights for the period of 2023-2027 are valued at $6.2 billion. Subsequently, the annualised cost of IPL 2023 is estimated to be $1.2 billion. A comparison of the annualised cost versus projected revenues reveals that there is a cumulative revenue shortfall of $650 million in IPL 2023.
MPA forecasts also reveal that Star India’s ad sales dropped by 50pc for the IPL 2023 edition when compared with 2022 when they weighed in at $442 million (as reported in Variety). And the proportion of subscription fees that Star attributes to its IPL business is also expected to be “significantly impacted in 2023.”
