In a recent social media post, Disney+ Hotstar announced that starting 31st March 2023, HBO content will be unavailable while reminding users of its vast library of content.
HBO’s decision to discontinue content sharing with Disney+ Hotstar is another setback to the platform after losing IPL streaming rights to JioCinema.
HBO shows streamed on Disney+ Hotstar include Game of Thrones, House of the Dragon, Succession, Obama, The Last of Us, Curb Your Enthusiasm, etc.
It has been reported that with an objective to stream more HBO content in India, Amazon Prime may widen its partnership with Warner Bros to stream more shows. HBO shows like The Staircase, The Flight Attendant, Doom Patrol, and Gossip Girl are already being streamed on Amazon Prime.
Disney+ Hotstar had 61.3 million subscribers at the end of October 2022, and in the December quarter, the platform witnessed a drop of 6pc or 3.8 million subscribers to 57.5 million. While IPL was the biggest property for Disney+ Hotstar, the platform also had HBO’s biggest hits like Game of Thrones (GoT) and more recently, its prequel House of The Dragon.
Competition among OTT streaming platforms in India is heating up and Disney+ Hotstar might face further attrition in its subscriber base with the discontinuation of HBO content. That’s one perspective. There are others who believe that going regional and mass will more than makeup for the loss.
On international content, Hotstar has Netflix’s international properties like Money Heist, Squid Games, and Emily in Paris to contend with, while Amazon has prioritised regional content like Mirzapur, Pathak Lok, and more recently Farzi.
It’s high time that Hotstar created some properties of its own while keeping the evolving Indian viewership habits in mind, say industry watchers.
“We believe the above (HBO content moving out) will have a significant negative impact on paid subscribers for Hotstar and maintain that the loss of subscribers will continue to happen towards June ‘23 quarter due to IPL. In terms of the recent HBO content moving out of Hotstar, we estimate the subscriber loss moving towards the upper end (around 25-30 pc in total), of the 61.5mn subscribers at peak,” observes Karan Taurani, SVP, Elara Capital.
Taurani adds that the active paid subscription base for Hotstar could settle at 42 to 45mn subscribers over the next three quarters.
So, how can the platform make up?
“Netflix too had seen some pressure due to its loss of Disney content in 2019. However, they invested in building original IPs and shows which has paid rich dividends over the last four years. We expect Hotstar to also invest aggressively into fresh and original content which needs to click well with audiences in order to ensure subscriber retention and minimise the negative impact. Investment into original content and new IPs takes some time as this requires a transition time (12 to 18 months),” says Taurani.
“Disney+ Hotstar has been streaming HBO content, including tentpoles such as Game of Thrones, Succession etc, since 2016. While HBO content, in particular Game of Thrones, helped Disney+ Hotstar build its subscriber base when it first launched SVOD, English-language content is still considered a niche in India. Disney+ Hotstar’ssubscription base dropped late last year, attributed mainly to the loss of the IPL cricket tournament. Disney-owned platform is under pressure to reverse its subscriptions decline with more mass market content and this move seems to be in line with a re-set that the company plans to do, probably with more local / language content, appealing to the youth / Gen Z the largest user base of streaming overall,” says Jyoti Malladi, Group Service Line Leader BHT & Creative Executive, Creative Excellence, Ipsos.
According to Daoud Jackson, Senior Analyst, Pay-TV and Online Video, MENA, Turkey and India, OMDIA, OTT services are fairly new to India and the market is still developing, so it’s hard to say exactly what shape it will take.
“Indian consumers are very price sensitive but many of these services are cheap, especially by global standards, and consumers have shown fairly high tolerance in other markets for keeping multiple OTT services simultaneously,” he explains.
“Especially if Viacom 18 offers premium content like IPL for free it’s very hard to say whether people will cancel subscriptions to Disney+ Hotstar, or whether they just subscribe to multiple services. Really, we’ve just entered chapter two of the Indian streaming revolution and the IPL on Disney+ Hotstar was chapter one,” he notes.
Jackson adds, “In terms of the HBO content, I would say two things. The first and most obvious question is “where does it go?” HBO Max doesn’t seem very likely to launch in India based on what we’ve heard, and some sources suggest it will go to Amazon. If that’s the case, Amazon subscriptions in India are cheap because of the extreme ecommerce competition, so again consumers may decide to keep multiple.”
According to Jackson, though HBO content is great, whereas in the UK or Germany there’s no real alternative to HBO content, in India, shows like Mirzapur or Criminal Justice attracted as big, if not bigger buzz, than House of the Dragon.
“One of the big strategies for Disney+ Hotstar will be investing in more content that’s not in English or in Hindi and just in the last week they announced new Telugu and Malayalam shows so that will be part of the strategy to make up,” he concludes.
