Paramount+ can expect a subscriber surge in 2023.
The streaming service, which announced in the Q1 earnings call that it would be expanding to India in 2023, will be the home for streamed games of the Indian Premier League, which carved out $6.2 billion worth of rights earlier this week. IPL cricket is the most popular sport in India and a driver for some of former rights-holder Disney+’s strong growth.
In retrospect, this move perhaps should have been anticipated once Paramount Global CEO of International Streaming Raffaele Annecchino announced the expansion plan. Launching in a new market would be a lot easier with a property commanding a rabid fan base and follows the blueprint of Paramount+ in the U.S. — launching with UEFA Champions League soccer — and Peacock, with English Premier League soccer.
But what does this all mean for Disney+?
The IPL was a core driver behind the growth of Disney+ Hotstar, with the start of the season at the end of Q1 each year coinciding with spikes in subscription until ending in Q2. The hope from Disney will be that many subscribers also have families and will be pressured to keep the service.
This is possible in the short term. The next iteration of the IPL won’t begin until March 2023 and that will be when true market forces are exerted upon Disney+. VIP+’s bet is that demand is relatively elastic. In other words, when a new service launches with IPL and other content, it will poach some subscribers.
It’s important to note, though, that Disney+ Hotstar will still maintain rights to international cricket, featuring the Indian national team, through 2024, which may mitigate some potential declines. It may also see Hotstar subscriptions becoming cyclical around major events — think how MVPD and VMVPD subscriptions spike around NFL season in the U.S.
Not that this is a bad thing. As VIP+ previously covered, the ARPU for Disney+ Hotstar seriously lags behind that of the rest of the world. Part of this is due to India being a developing country, but the cost of the IPL played a part, too.
Having fewer subscribers with a greater ARPU may well yield an uptick in overall profitability. The risk, however, is that Wall Street, which has been singularly focused on subscriber figures being the sole measure of success in streaming, has a knee-jerk reaction if subscriber numbers fall.
Note as well that Disney overall isn’t getting out of the cricket business in India. The company won the bidding for TV rights, paying more than Hotstar laid out for the TV and streaming rights in the 2018-22 rights window.
For now, expect Disney CEO Bob Chapek to address how the IPL wasn’t a key driver for Disney+ Hotstar subscriptions and seek to minimize the damage when speaking to investors. He will attempt to allay fears that there may see a subscriber decline.
It’s possible Chapek will cook up a content release strategy to mitigate losses, similar to when Disney+ premiered "Hamilton" in the final month of calendar Q2 2020 to bump up subscriber counts for the quarter.
With Disney+ set to launch in 60 countries across the world, overall subscriber growth will surely rise. This will mask the IPL decline. Analyst eyes will be on Disney next April when it's time for the first year-over-year comparisons for Hotstar Disney+ without the IPL to see what the difference is, even if total subscribers are up, owing to being in more markets.