Disney+Hotstar income remains flat in FY21; advertising sucks out Rs 480 Cr
With a monthly active user base of 227 million during the last fiscal year, Disney+Hotstar(D+H) has been the guiding light in Walt Disney Company’s Indian portfolio, becoming one of the market leaders among OTT platforms operating in the country (FY21). The app has also stood out for having a significant advantage over the competition, particularly competing OTT apps like Zee, Sony, and others.
The company has benefited from the live streaming of cricket events on its website, which was made possible by Star India’s $944 million arrangement with the BCCI in 2018. During the pandemic that hit last fiscal year, demand for streaming services was at an all-time high, yet Disney+Hotstar growth remained practically flat in FY21. According to Disney+Hotstar’s financial statement submitted with RoC, the company collected operational revenue of Rs 1,670.63 crore in FY21, a moderate 5% increase over FY20 revenues of Rs 1,593 crore
Disney+Hotstar is a free app with 400 million downloads available across app stores, but its exclusive content, such as sports streaming, is only available to premium users. Subscription income accounted for 50.04 percent of the company’s operational revenue in FY21, increasing by 34.3 percent year on year to Rs 831 crore.The fiscal year 2020-21 marked the first time that Disney+Hotstar’s subscription revenue exceeded its advertising revenue. Brands cut back on their advertising spending during the year affected by the Covid-19 outbreak, resulting in an almost 15% YoY decline in advertising income to Rs 829.7 crore in FY21.
During FY21, Disney+Hotstar additionally made Rs 9.93 crore from the licensing of content rights.The OTT platform broadcasts a huge number of sporting events in eight languages, therefore license payments were the company’s largest expense in FY21. During the previous fiscal year, such charges were Rs 708.6 crore, accounting for 30.74 percent of total costs.
Through its ‘Quix’ function, Disney+Hotstar promises to have over 100k hours of content spanning TV episodes and short-form video. In FY21, the business spent Rs 397.6 crore on developing content for its platform, up 22% from Rs 326 crore in FY20. These charges accounted for 17.3 percent of the company’s annual expenses.
During FY21, Disney+Hotstar’s EBITDA margins fell 945 basis points to -29.47 percent, and the financial sheet showed outstanding losses of Rs 2,888.6 crore as of March 31, 2021. To maintain the overall improvement in FY 22, the company will rely on renewals at the higher pricing, increased advertising from the ICC T20 World Cup, and overall cost reduction.
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