IPL’s crucial role in Disney+ Hotstar’s rising subscriber base

Disney+ Hotstar, which streams the annual sporting extravaganza Indian Premier League (IPL) and other sports events like Football Premier League (FPL), Hero Indian Super League (ISL) and Pro Kabaddi League (PKL), brings in 36.4 per cent (50.1 million) of the total global paid subscribers (137.7 million). This was revealed during Disney’s Q1 earnings call.

A 2021 market report from research firm Media Partners Asia, states that in India, Prime Video has 22.3 million subscribers and Netflix has 6.1 million subscribers.

Disney+ revealed that more than half of its 7.9 million new subscribers worldwide, came from Disney+ Hotstar. During the call, Christine McCarthy, senior executive vice president and chief financial officer, The Walt Disney Company, acknowledged that this growth is largely due to IPL.

These numbers reinforce the importance of IPL for the streaming platform. The sports event has emerged as the world’s third-largest, in terms of viewers. Last year’s IPL reached a total of 600 million viewers, according to the Board of Control for Cricket in India (BCCI) estimates. This year, the co-presenting sponsorship rate was Rs 157 crore, the powered by rate was Rs 60 crore and the associate sponsorship rate was Rs 30 crore.

Sony India had TV telecast rights of the IPL, from 2008 until 2017. Later, Star India won the cumulative (broadcast and streaming) rights for the league, until the 2022 edition. Disney+ Hotstar also held the streaming rights between 2015 and 2017. BCCI is auctioning the broadcast and live streaming rights for the 2023-2027 period, starting June 12.

The competitive landscape in Indian sports broadcasting is set for a major churn. Last month, Reliance Industries and Viacom18 entered into a partnership with Bodhi Tree Systems, an investment platform run by James Murdoch’s Lupa Systems and Uday Shankar, with the intent to bid for the IPL broadcast rights. Alphabet Inc., Google’s owner, has also expressed its interest in bidding for the rights.

As per media reports, Amazon.com Inc., The Walt Disney Co., Sony Group Corp., Zee Entertainment Enterprises, fantasy-sports platform Dream11, sports aggregator platform FanCode and South Africa-based group of television channels SuperSport, are some of the others who are vying for the coveted asset.

During the earnings call in February, Bob Chapek, Disney’s CEO, had said that it is going to try to extend its IPL rights, but he’s confident that even if it does not win the auction, it would still be able to achieve its subscriber target of 230-260 million globally by 2024.

“While certainly, it's an important component, the local content that we're developing really will mitigate the impact if we were not to win the IPL auction. It's not like we see that business evaporating if we don't get it.”

However, experts suggest that IPL and cricket rights will remain critical for Disney+ Hotstar. “It will be critical to maintain the growth in user base and leadership in India. It will be tougher this year because the digital rights are being offered independently. Also, there are multiple players in the space. But I still believe it will be a front runner,” said Uday Sodhi, senior partner, Kurate Digital Consulting (former business head, SonyLIV).

Manav Sethi, founding CMO, ALTBalaji, feels it may not be an issue of survival for Disney Star. “Back in 2015, when it bagged the streaming rights, it didn’t have the kind of content library it has now. It’s not going to be easy to retain the IPL, not because it doesn't have the money, but because others, who have survival issues, also have the money now.”

Live sports is a huge draw on streaming for popular sports across the world. It draws in fans who follow the sport and forms an important part of the overall offering for OTT platforms. A RedSeer report in February 2020 stated that sports content was the most consumed content on OTTs in 2020, with an overall 13 per cent hike in viewership across platforms.

SonyLIV streams events like FIFA World Cup, international cricket tours of the Indian team and even World Wrestling Entertainment (WWE). Amazon Prime has acquired the India territory rights for New Zealand cricket through 2025-26.

“Since 2015, Hotstar hasn’t had to look back for viewership growth. It has been nothing short of a masterstroke of sorts to put money on IPL against Netflix's billion dollars content war chest. And that strategy evidently paid off for them,” Sethi said.