Disney gambles on free cricket to turn the tables in India streaming war

investing.com:

By Aditya Kalra, Munsif Vengattil and Dawn Chmielewski

NEW DELHI/LOS ANGELES (Reuters) — Walt Disney (NYSE:DIS) is attempting to revive the fortunes of its streaming business in India by offering free cricket on smartphones, betting that the strategy will boost advertising revenue and offset the impact of a subscriber exodus.

The India streaming operations, which were Disney's biggest last year globally by users, posted a loss of $41.5 million on revenue of $390 million for the year to March 2022, its last disclosed results.

With subscriber exits accelerating and slashing the user base by a third between October last year and July, the Burbank-headquartered entertainment giant's financial performance in the country is only expected to come under more pressure.

Disney's woes are a cautionary tale about the Indian market where expectations about a swelling middle-class are often frustrated by deeply cost-conscious consumers.

The company acquired Indian streaming service Hotstar when it paid $71 billion for some 21st Century Fox global assets in 2019. With the streaming rights of the Indian Premier League (IPL), the world's richest cricket league, in the bag, Disney made cricket on Hotstar a paid service in 2020 and was confident about garnering up to 100 million users within years.

But Indian billionaire Mukesh Ambani snatched IPL rights away in a $2.9 billion bid last year, and then streamed games for free. Soon, Disney subscribers fled — out of 61 million users in October, roughly 21 million had left by July.

Disney internally recognises it misjudged Indians' willingness to pay — people signed up for Hotstar when it had IPL, but didn't stick around to buy more premium plans to watch other content, two Disney sources