End of season: Subscribers may turn cold to Hotstar as HBO shows go dark

If you were one of those waiting for the entire fourth season of Succession to drop so that you could binge-watch it over a weekend, you have missed the train. HBO has packed up its boxes and left Disney+ Hotstar (Hotstar). From April 1, fan favourites, such as Succession, The Last of Us, The Sopranos, Veep, Game of Thrones, and many more, will go missing on Hotstar.

But it’s Disney+ Hotstar that may feel the pain later as this development could mean subscribers leaving it. Disney Star, the Indian unit of Walt Disney, recently decided against extending its longstanding content deal with Warner Bros. Discovery, resulting in the removal of 144 HBO Originals. The disagreement on HBO's asking price of $10 million yearly for a five-year deal was a contentious issue between the two entertainment giants.

“I am a big fan of shows like The Wire and Westworld, both of whom were available for streaming in HD on Hotstar, thanks to its tie-up with HBO. With new offerings like Succession and The Last of Us quickly becoming my favourite, the larger portion of my Hotsar consumption came from HBO shows,” said Mayank Verma, a Gurugram-based IT professional. “I am mulling the option of ending my subscription soon.”

Verma’s consumption pattern is not unique. Many of the subscribers Business Standard spoke to said HBO’s offerings were a major reason for their Hotstar subscription. HBO shows and films are not available for streaming on other platforms in India and Hotstar was the exclusive platform for streaming these.

Karan Taurani, SVP at Elara Capital, also believes HBO’s exit will cause Hotstar to continue losing subscribers through the June 2023 quarter. “We estimate the subscription loss moving to somewhere between 25 and 30 per cent, from the peak subscriber numbers of 61.5 million reached over the past three quarters in India and a few other Asian countries,” he said.

Taurani said 80 to 85 per cent of the 61 million subscribers are based in India. “So, nearly 12 to 15 million subscribers will be lost,” he noted. 

The loss of the HBO bouquet comes right on the heels of another big blow to Disney+ Hotstar, when it conceded the digital streaming rights of the Indian Premier League 2023 to Viacom 18. 

However, Taurani said, the paid subscriber base for Hotstar could settle at 42-45 million over the next three quarters. “There is still respite in the form of catch-up television, which drives a large chunk of viewership on broadcaster OTTs. And Star is the market leader for TV content. The upcoming cricket World Cup and Disney’s massive global and Indian movie catalogue will help stymie the subscriber loss,” he said.

With Marvel’s and Star Wars’ offerings looking to heat up in 2023, fans of these franchises would also like to hold on to their Hotstar subscriptions despite the HBO exit.

However, pundits think that cricket will be key. “BCCI is expected to renew its contracts for India matches this year and if Hotstar ends up losing that for CY24 and beyond, it will be a bigger blow as the active paid subs base can move even below 40 million over the medium term,” says Taurani.

A few subscribers like Suchetna Sharma, a Mumbai-based media professional, nonetheless believe that the impact on Hotstar’s subscribers should be gauged while keeping its various audience segments in mind. “While the loss of HBO shows will hurt, one must realise that Disney+ Hotstar still has a diverse cross-segment content card. With Star’s TV serials, Disney’s rich child-focused content, anime shows, and blockbusters from Marvel, the lateral spread remains wide-ranging, even if the depth of content might have been reduced.”

THE HBO GUT-PUNCH IN NUMBERS 

• Nearly 80 to 85% of the 61 mn subscribers are based in India 
• Nearly 12 to 15 million (25 to 30 per cent) subscribers will be lost 
• Hotstar could settle at 42-45 mn over the next three quarters 
• If BCCI reviews its media contracts, and Hotstar loses out, its subscribers could fall below 40mn over the medium term