In Short:
Star India’s operating income losses increased to $314 million from $216 million the previous year, as reported by The Walt Disney Co. Disney attributed this to higher production costs from the ICC Men’s T20 World Cup, lower affiliate revenue, and increased advertising revenue. Disney+ Hotstar had 35.5 million paid subscribers, with plans to drive subscriber growth through measures like curbs on password sharing and price increases.
Star India’s Operating Income Losses Grow by 45% to $314 Million
Oh no! Star India, a part of The Walt Disney Co., experienced a 45% increase in operating income losses, reaching $314 million as of 29 June 2024. This is compared to $216 million in the same period last year. The parent company, Disney, revealed these figures in their earnings report for the June quarter of 2023-24.
Revenue and Factors Impacting Losses
Disney follows an October to September fiscal year, and Star India reported a revenue of $279 million in the third quarter, slightly higher than the $277 million recorded a year ago. The increase in operating loss at Star India was primarily due to higher programming and production costs linked to the timing of the ICC Men’s T20 World Cup, a decline in affiliate revenue from lower effective rates, and a boost in advertising revenue tied to the World Cup schedule, Disney explained in a statement.
Disney+ Hotstar Stats
Disney+ Hotstar had 35.5 million paid subscribers by the end of the quarter, down slightly from 36 million in the previous quarter. However, the platform’s average monthly revenue per paid subscriber increased from $0.70 to $1.05, thanks to higher advertising revenue, the company noted. It’s worth mentioning that in India and certain Southeast Asian countries, the streaming service operates as Disney+ Hotstar.
Strategies for Growth
Disney recently implemented restrictions on password sharing and has hinted at potential price hikes to drive subscriber growth. Hugh Johnston, senior executive vice president and chief financial officer at Walt Disney, expressed confidence in this approach during the earnings call, emphasizing the value provided to consumers and the measures taken to improve the overall product and reduce customer turnover.
Future Outlook
Johnston also shared optimism about the company’s financial trajectory, highlighting the shift from substantial quarterly losses to profitability. He envisions sustained growth and profitability, aiming for double-digit margins in the future. Additionally, as Disney prepares to deconsolidate its India business, more details on potential earnings contributions will be disclosed post-deal closure.
Collaboration with Reliance Industries Ltd
In a strategic move this February, Reliance Industries Ltd (RIL) and The Walt Disney Co. joined forces to merge the operations of RIL’s associate company Viacom18 Media Pvt. Ltd with Disney’s Star India. As part of this partnership, RIL committed to investing ₹11,500 crore into the joint venture, valuing the combined entity at ₹70,352 crore on a post-money basis, excluding synergies as announced by both entities.
