Walt Disney Company, which bought Star India, is taking Hotstar, the country’s largest over the top (OTT) channel, to global markets.
Hotstar has been launched in three key markets — the US, Canada, and the UK — and the aim is to reach majority of the 40 million South Asians living abroad.
According to sources, Hotstar will concentrate on five markets, which include Singapore and West Asian countries. These constitute more than 75 percent of the ethnic South Asian population. The plan is to penetrate a vast majority of these subscribers in four-five years.
To push Hotstar, Disney has discontinued linear television offers in most of these countries for Star TV channels available through cable. The programming would concentrate on plays in Hindi and regional languages and movies, and, wherever possible (if it has not sold the rights), sport.
In the US, for instance, Star TV channels were viewed on television by around 200,000 subscribers, but the subscription fee cable operators charge is more than $25 a month.
Hotstar, on the other hand, is being offered at $10 a month, an attractive price that has helped the channel to gather more subscribers than television has. With digital making delivery of content far cheaper than through cable or direct-to-home because of the high distribution cost, Hotstar says this is a more cost-effective way to reach ethnic South Asians.
Sources say that talks are on as to how Hotstar could leverage Disney’s strength in many of these markets, especially though their own OTT offering Disney+ which is expected to challenge the might of Netflix and Amazon Prime and also Apple+ across the globe and especially in the US.
Of course, Hotstar will face tough competition from Zee5, which is present in over 190 countries and provides content tailored to those markets. It is also going beyond the south Asian diaspora and is planning to have programmes dubbed in other languages like Malay, Thai, Bahasa , German and Russian languages. However it does not give its global subscriber base for OTT separately.
With an active subscriber base of 300 million customers, Hotstar is far ahead of its competitors (Zee 5 its closest competitor is at 76.5 million subscribers) but its subscription revenues from the channel is only 7-8 percent of its revenues. However, a big push is on to increase it to 50 percent in the next three years, which is far more aggressive than industry estimates like the FICCI-EY report projection that it will not be more than 17.5 percent of total revenues by 2021. In India however the huge increase in viewership has also been pushed by Hotstar’s control over premium cricket like the coveted Indian Premier League (IPL).
According to industry estimates, Hotstar splurged over Rs 4,000 crore on content in India in 2017, which also includes the cost of digital rights for cricket.
While Disney is pushing to take Hotstar global it has on the other hand decided not to launch Disney + or Hulu in India, its OTT platforms. Instead the plan in India is to incorporate their relevant content within Hotstar which will remain the one stop OTT channel from the group.―Business Standard