Since the launch of Disney+ in 2019, the growth in global streaming subscribers across Disney platforms has been impressive. A large driver of this subscriber growth came from Disney+ Hotstar subscribers, which helped Hulu, Disney+, and Disney+ Hotstar to peak at over 211 million total global subscribers in Q3 2022.
However, since that quarter there has been a clear drop-off in Disney+ Hotstar subscribers. For reference, as of that quarter, Disney+ Hotstar had more subscribers than either Disney+ or Hulu in the U.S. The drop-off in Disney+ Hotstar subscribers followed the platform losing the streaming rights to IPL cricket in India.
Parrot Analytics’ Streaming Economics model can break down subscribers by region for the three biggest global streamers, showing where Disney+ stacks up against primary competitors Netflix and Amazon Prime Video around the world.
Between reported Disney+ Hotstar numbers and the Parrot model’s estimated subscribers to Disney+ in the Asia Pacific (APAC) region, Q3 2022 represented a high water mark for subscribers across Disney streaming services in APAC. (It’s important to note that core Disney+ subscribers are not broken out by region in the company’s earnings reports.)
In Q3 2022, Parrot estimated that between Disney+ Hotstar and core Disney+ the company could claim over 70 million subscribers in the region. Compare this to Netflix, which reported 36.23 million subscribers in APAC, and Amazon Prime Video, which we estimate was slightly ahead of Netflix in that quarter.
Fast forward to this year and the tables have turned. While it is still a close contest between Amazon, Netflix, and Disney, the total number of subscribers across Disney+ Hotstar and core Disney+ now trails Netflix and Prime Video. The targeted content investments in the region by Netflix and Amazon are clearly yielding results. Disney’s decision to focus on exporting its English language content around the world as opposed to making local content investments, as well as the loss of IPL cricket rights in India, have meant that subscriber growth for Disney in this region has not kept pace with rivals.
This is not necessarily bad news, however. Per the company’s latest earnings, the ARPU (average revenue per user) of Disney+ Hotstar was only $0.78 — a fraction of the ARPU generated by core Disney+ internationally ($6.95) and Hulu domestically ($12.54).
Rapid subscriber growth from Disney+ Hotstar helped boost the company’s global subscriber count. But with Wall Street now focused on streaming profitability it makes sense for Disney to target subscribers with the most potential to generate revenue.
Positive forward guidance from the company’s November earnings call projected that entertainment streaming will generate $1 billion in operating profit next year. That’s a major turnaround from a year ago when the company’s DTC streaming business posted a $387 million loss and shows how the company’s streaming business is moving in the right direction.
