HBO Content to Exit Disney+ Hotstar: How Will It Affect the Streaming Platform?

HBO shows like 'Game of Thrones' and 'The Last of Us' are to be moved off Disney+ Hotstar.

Posters of Game of Thrones and The Last of Us.

(Photo Courtesy: IMDb)

Disney+ Hotstar has confirmed that it will no longer carry HBO content from 31 March onwards in India. HBO shows like the The Last of Us, Succession, and the highly-successful Game of Thrones will be moved off the streaming platform.

How will this affect the platform's subscriber base in India? What's the reason behind the decision? Here's a breakdown.

The Announcement

The streamer first announced the news on 7 March on Twitter, in response to a query of a subscriber asking about the availability of Perry Mason's Season Two.

The official Twitter handle of Disney+ Hotstar tweeted, "Starting 31st March, HBO content will be unavailable on Disney+ Hotstar. You can continue enjoying Disney+ Hotstar’s vast library of content spanning over 100,000 hours of TV Shows and Movies in 10 languages and coverage of major global sporting events."

But, Why?

In November 2022, in a surprise move, Disney+ Hostar fired then CEO Bob Chapek amid dwindling profits of the platform, and a steady decline in share prices. The company brought back former Disney CEO Bob Iger to helm affairs, who promptly announced restructuring of the company and cost-cutting measures.

• Iger announced plans to cut $5.5 billion in costs, including $3 billion in non-sports related content.

• Disney+ Hotstar's subscriber count decreased by 6 percent to 57.5 million during the quarter that ended on 31 December 2022, despite being India's largest streamer.

• The decline is partly attributed to the loss of distributing rights of the Indian Premier League cricket tournament, which Viacom18 acquired last year in a huge $2.6 billion deal.

While HBO tentpoles like Game Of Thrones, helped the Disney-owned platform establish subscription tier in India, English-language content is still considered a niche market in the country.

Impact On Viewership

The move is expected to have a significant negative impact on the streamer's paid subscribers in India. Karan Taurani, Senior Vice President of Elara Capital, explained:

• It is estimated that the subscription loss will increase towards the upper end (around 25-30 percent total) of the 61.5 million subscriptions at peak.

• In terms of HBO's content exit from Hotstar, the estimated subscription loss will be on the higher end (around 25-30 percent in total) of the 61.5 million subscriptions at peak.

• The loss of subscriptions will continue to happen towards June 2023 quarter, as a result of the Indian Premiere League (IPL).

According to various estimates, Hotstar's active paid subscriber base could settle at 42-45 million over the next three quarters, due to respite in the form of:

• Catch-up television content (which drives a significant portion of broadcaster OTT content; Star is the market leader for TV content).

• The upcoming Cricket World Cup (T20).

• Disney’s enormous global and Indian movie catalogue.

• Other Indian and international cricket content.

BCCI is anticipated to renew its contracts for India matches this year. As per the inputs, Hotstar is likely to suffer a bigger blow, if it ends up losing that for CY24 and beyond. As a result, the active paid subscriber base could even go below 40 million over the medium term.

According to Taurani, the free availability of IPL - the most premium content which costs Rs 60 crore in terms of its annual content cost, is also expected to converge the average subscription revenue growth for the OTT platforms India in the near future.

• It is not likely to cut the average revenue per user (ARPU) for OTT platforms as they are already existing at reasonable levels.

• However, Disney+ Hotstar, is likely to anticipate a drop in its ARPUs due to the loss of IPL and HBO content.

• Platforms are anticipated to limit password sharing or switch to small ticket subscription packs and promotional offers in order to increase or maintain their subscriber base.

Shows That Will Be Unavailable In India

Here is a list of shows that will be moved off Disney+ Hotstar from the 31 March in India.

• Ballers

• Band of Brothers

• Catch and Kill

• Curb Your Enth

• Entourage

• Game of Thrones

• House of the Dragon

• Mare of Easttown

• Mind Over Murder

• Obama

• Scenes from a Marriage

• Shaq

• Succession

• The Baby

• The Gilded Age

• The Last of Us

• The Nevers

• The Sopranos

• The Time Traveller's Wife

• The Wire

• Undercurrent

• Watchmen

• We Own this City

What Next?

As per reports, the industry analysts in India are anticipating that Prime Video would be a logical fit for the HBO content, either as part of its SVoD (Subscription Video On Demand) service or with the introduction of HBO Max as a Prime Video Channel in India.

• In addition, Prime Video announced a deal with Warner Bros Discovery (WBD) in July 2022, to stream a slate of HBO Max originals in India.

• Some existing HBO shows that are currently streaming on Prime Video include Gossip Girl, The Flight Attendant, Raised by Wolves, and the popular comedy-drama, And Just Like That.

However, both Warner Bros Discovery and Prime Video haven't commented on the same yet.