Daybreak - The ICC World Cup is Disney+ Hotstar’s last chance

Episode Date: October 9, 2023

Losing IPL rights last year to Jio and then dropping HBO content has cost Disney+ Hotstar at least 21 million subscribers in just a year.The streaming giant though, decided that IPL or no IPL cricket is going to be its biggest customer acquisition funnel in 2023. And it looks like they are holding on to that strategy. The Asia Cup was streamed for free on Disney Hotstar. Now, the ICC Cricket World Cup is on and it's  available on Disney Hotstar too. The OTT giant is offering free live streaming of the event to its mobile users.But a lot of the new survival strategy, put together by the Disney Hotstar's head honchos, depends on how India does in the tournament.Tune in.CORRECTION: In the episode, the host mistakenly refers to the ICC Cricket World Cup as ICC T20 Cricket World Cup. The error is regretted. Free Read:What airports really want to do with DigiyatraAlso listen to:Disney leaves Jio the keys to the kingdomDaybreak is produced from the newsroom of The Ken, India's first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the Sita Ramancahans, my colleague. secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they managed to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into.

to the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get an alert, as soon as we release our first episode, please follow Intermission on Spotify and Apple Podcast. or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode.

If you knew something that you'd worked hard for was on the verge of total failure, what would you do? Just watch the inevitable collapse take place or would you give it one last shot? Like, go out in a place of glory, you know? The current heads of India's streaming giant Disney hot star seem to have decided to do just that, give it their best shot, or at least exit the game like real sports. We've talked about the downfall of Disney Hot Star in India many times on daybreak.

The decisive moment was when it lost the right to streaming the IPL or Indian Premier League last year. It was the crown jewel for Disney Hot Star and we all know who took it. And then it was dealt with another blow when Geo pulled the plug on bundling. It removed Disney Hot Star from all of its streaming bundles. And then Disney Hot Star also dropped all HBO content from its platform, including popular shows like Game of Thrones. All of this cost Disney Hot Star at least 21 million subscribers within a span of just a year. But the streaming giant kept its head high and decided that IPL or no IPL,

cricket was going to be its biggest customer acquisition. funnel in the year 2020. And it looks like they are holding on to that strategy. The Asia Cup was streamed for free on Disney Hot Star and now the ICCT 20 Cricket World Cup is on and also available on Disney Hot Star. In fact, the OTT giant is offering free live streaming of the World Cup to its mobile users. Even after everything though, Disney Hot Star is still the leader of the Indian OTT space if you go just by subscriber numbers. But the streaming platform is also nearing the end of its ICC

or International Cricket Council rights cycle. And to make things worse, its parent company Disney seems to be planning to wash its hands off Disney Hot Star. Meanwhile, though, there is a set of people that seem to be undeterred by all this, the OTT's leaders in India. They're hell-bent on getting back on the track of profitability, or at least go out in a blaze of glory. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nickda Sharma, and I don't chase the new cycle. Instead, thrice a week on Mondays, Wednesdays and Fridays, I will come to you with one business story that is worth understanding and worth your time. Today is Monday, the 9th of October. The six-week-long cricket World Cup is expected to get 800.

million viewers in India. This will translate into a little more than $260 million in ad revenue for Disney Hot Star. And as you can imagine, after all the news about its imminent downfall, everybody's eyes are on the streaming giant and its strategy to making the most out of this cricket World Cup. This time, though, it seems that Disney Hot Star is going to play the game by its own rules. But the stakes are higher than ever before. Because it seems that Disney, which has been trying to dance to the tunes of the Wall Street for quite some time now, is thinking of selling the OTT giant in India or going for a joint venture. And like I told you earlier, this World Cup is the near climax of its ICC rights cycle. And its future looks a little uncertain and quite complex, to be

honest. My colleague Pratap Vikram Singh, a reporter with the Ken, spoke to Disney Hot Star executives. Two of them told him that the streaming platform has been ready to handle five times the number of advertisers and users compared to 2019. And to figure out how to handle all of this, it is going back to where it all began, that time before 2020 when Disney came into the picture. Disney Hot Star is changing its strategy this time. And this is the India leadership's last chance at making its previous model work again. The OTT giant has shifted away from its subscription-focused strategy or SVOD, which is something that Disney had introduced and has gone back to using ads to generate revenue,

which is also known as AVOD. The leadership has internally labeled this as a path to profitability. But to be honest, Disney Hot Star didn't really have another option anyway. They were kind of cornered into taking the ad route when JuCinema decided to stream IPL for free. A top executive of Disney Hot Star told again that the strategy is to use sports content to attract users and generate ad revenue. All of this while also expanding the advertiser base, introducing more Hot Star special shows, maintaining the regional content leadership, and slowly converting a loyal audience into subscribers. Now, before you get tricked into thinking, things are actually looking great for Disney Hot Star and it is finally getting its act together. Listen to this.

At least five senior former company executives that the Ken spoke to said that Disney's, Disney Hot Star lost the plot two years ago. Stay tuned for more on this, but before that, my friend Aksha has a message for you. India's crowded airports have always been a concern for passengers. You will not believe Delhi's international airport is among the top 10 busiest airports in the world. So any measure taken by the Indian government, of course, to shorten the wait time in queues is a good idea, right? Well, say hello to Digiatra. A contactless facial recognition entry system launched just last year.

Once you get Digiatra, you no longer have to get your ID and flight tickets checked by a CSF personnel. You can simply enter the airport using facial recognition technology. It is being advertised as the future of air travel. And both airlines and airports have been promoting Digiatra incessantly. In fact, social media is filled with stories of passengers being relentlessly pursued to enrol for Digiatra. This definitely raises the logical follow-up question of, why are airports and airlines suddenly so interested in making air travel convenient for you? The Ken staff writer Anushka Jane follows the money to find out.

If faster processes free up a traveler's time, it means one will spend more time inside the airport browsing through the shops and purchasing food and drinks. So airports stand to make money if you spend time inside the airport rather than outside. In her story, Anushka touches upon many such interesting reasons to exist for Digiatra, besides just making air travel convenient. And this story has now been made available for free for exactly 24 hours, just for today, the 9th of October. So go ahead, give it a read and share away with your friends before the counter runs out.

I'm Aksha from the Ken's Newsroom. Thank you for listening to us. If you like what we do, please rate and review us wherever you get your podcasts. And now, back to Snigda. Right, and where was I? Okay, I was telling you about what two former top executives from Disney Hot Star told the Ken. That the OTT giant actually lost the plot two years ago. They believe that it wasted a really important phase between 2021 and 2022.

Not just that, many of its top executives have also left. For example, the chief technology officer Akash Saxana and many from his team left the company and joined Wycombe team. The current leadership, including the head of Disney Hot Star, Sajit Sivanandan, is entirely new. and the sales and the content teams do not report to him. The future of the platform after the World Cup is over is not looking very bright. Because the ICC matches next year are going to be held in the US. Obviously, the timings will be inconvenient for Indians and that will affect viewership, not in a good way. But it's not like Disney Hot Stars' India leadership is not thinking about all of this.

They are well aware, which is why they are going up. all out this year. Their aim is to get a lot of advertisers, even if it means selling ad space at a lower price. For example, a former company executive told us that Hot Star has cut down the CPM rates. CPM rate is basically a metric that represents how much it costs an advertiser to show their ad to 1,000 people. For comparison, for the 23 IPL, new cinema was charging $180. In response, Disney Hot Star has lowered its rates to $199 for India matches and $40 for non-India matches. This brings the average CPM to about $140 to $150.

A former executive who works closely with the ad sales team told Pratab that earlier Disney Hot Star had done the opposite. It progressively increased its CPM risk. rate from $120 in 2019 to $240.40 in 2022. But Disney Hot Star has changed its strategy this year. And a top company leader declared that this is the platform's third phase. The first one was when the content was free between 2015 to 2019. And the second phase was when Disney came on board and tried to build a subscription model.

Whatever it is, a lot is riding on how India plays in the ICC World Cup. Last night, it managed to win against Australia, so that is one small sigh of relief for the head honchos at Disney Hot Star. Daybreak is produced from the Newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature. stories, newsletters, subscriber-only apps and podcast extras.

Head to the ken.com and click on the red subscribe button on the top of the website. I am Snigda Sharma, your host, and today's episode was edited by my colleague Rajiv Sien.