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The Walt Disney Company reported over 118 million global paid Disney+ subscribers for the quarter ended October 2, 2021.
The company recorded net additions in subscribers across its domestic and core international markets, excluding Disney+Hotstar, Chief Financial Officer Christine McCarthy said during an earnings call on November 10.
This is the first decrease in Disney+Hotstar’s subscriber base since Disney began reporting the numbers last year.
“We ended the fourth quarter and the fiscal year with over 118 million global paid Disney+ subscribers, reflecting over 2 million net additions from Q3, in line with the subscriber guidance we gave in September,” McCarthy said during the call.
“Subscribers across our domestic and core international markets, excluding Disney+Hotstar, grew by almost 4 million from Q3 to Q4. Disney+Hotstar subs decreased versus the prior quarter and accounted for about 37 per cent of our total Disney+ paid subscriber base, as of the end of the fourth quarter,” McCarthy added.
Disney+ had reported 116 million global paid subscribers in the last quarter, with Disney+Hotstar accounting for 40 per cent of its subscriber base, an estimated 46.4 million. Disney+Hotstar saw its subscriber base declining — at 37 per cent of the platform’s global paid subscriber base, it works out to about 43.7 million subscribers, down 2.7 million from the past quarter.
Disney+’s average revenue per user (ARPU) in the fourth quarter was $4.12. Excluding Disney+Hotstar, it was $6.24 or an increase of about $0.12 from the previous quarter, continuing to benefit from recent price increases, McCarthy said.
IPL impact
ARPU for Disney+Hotstar decreased this quarter due to multiple factors, including lower per subscriber advertising revenue due to fewer IPL matches than in the past quarter.
“Disney+Hotstar is included in our overall Disney+ guidance that we reiterate to be profitable in 2024. But as it relates to ARPU specifically, there’s been a lot of noise in the Indian market, a lot of which has been around sports,” said McCarthy.
“So when you look at the ARPU for Hotstar on a linked quarter basis from Q3 to Q4 this year, it actually decreased, and that was a result of lower per sub advertising revenue because there were fewer IPL matches this year,” McCarthy said.
“When we think about ARPU overall, there’s several levers here. There is a price-value relationship over time, high-quality content. And the content in India is really two things. It’s not only the IPL, but other key sports beyond cricket,” McCarthy said.
Local programming
“And also there’s a big general entertainment component. We have all of our Disney+ content over there for all the different labels that we have — Disney Pixar, Marvel, Star Wars, and so on. But they also have over 18,000 hours of original local programming that is produced every year. So, once again, I think the upside potential is when all things are working, also cylinders are working, and we’ll be able to take price up as the market allows,” McCarthy further added.
Disney+Hotstar was launched in India on April 3, 2020 (as a conversion of the preexisting Hotstar service), on September 5, 2020, in Indonesia, on June 1, 2021, in Malaysia, and on June 30, 2021, in Thailand.
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