Disney today lowered its long-term forecast for Disney+ subscribers.
It expects core Disney+ subs, not including the Disney+ Hotstar service in India, to reach 135 million to 165 million by the end of fiscal 2024. CFO Christine McCarthy said the company estimates the Hotstar service will have “up to” 80 million subscribers in the same period. Disney expects some users to migrate after it loses streaming rights next year to India Premier League cricket, a huge draw in the region.
Execs had previously forecast total Disney+ including Hotstar would reach 230-260 million in FY ’24. The forecasts today imply at least 15 million fewer total subs than anticipated, in a range of 215 million to 245 million.
On a call after earnings, CFO Christine McCarthy noted, “We always said that non-Hotstar … would be 60-70% of the 230 to 260 million base.”
Disney’s fiscal year ends in September. “We intent to refine this target over time as subscriber visibility in India will be clearer when cricket sales rights are completed.”
Disney’s streaming rights to Indian Premier League cricket made Disney+ Hotstar the fastest growing service in the Indian market. (Disney-owned Star India has retained rights to the TV broadcasts for about $3 billion.) Viacom18, a venture of Paramount and India’s TV18, won the bidding war to stream cricket starting next year.
“Excluding the impact of any significant future macro headwinds, our core Disney+ subscriber target range is 135 million to 165 million by the end of fiscal 2024 – largely consistent with previously provided guidance that non-Hotstar Disney+ subscribers in 2024 would approximate 60%-70% of the expected 230 to 260 million total subscriber base,” McCarthy said.
“We are, however, updating subscriber guidance for Disney+ Hotstar, to up to 80 million subscribers by the end of fiscal 2024. We intend to refine this target over time, as subscriber visibility in India will be clearer once the ICC and BCCI cricket rights sales processes are completed. As you may know, we recently made the disciplined decision to not proceed with the Indian Premier League digital rights, and will evaluate these rights with that same discipline.”
The CFO said Disney+ will hit peak losses in the current 2022 fiscal year. And, despite the Hotstar issue, Disney “remains confident that Disney+ will achieve profitability in 2024 and “look forward to several upcoming catalysts including reaching a steady state of tentpole original content releases, delivery of premium general entertainment and international local originals” along with the launch of an ad-supported tier announced earlier.
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