IPL suspension may hit Disney+ subscribers’ growth, ad revenue, says top exec

Disney+Hotstar accounts for one-third of Disney+ total subscribers

KOLKATA: When the Board of Cricket Council of India (BCCI)’s announced on 4 May, that it is indefinitely suspending the Indian Premier League (IPL) mid-way, the decision was backed by advertisers and broadcasters alike. The health and safety of players and staff was indeed paramount in  wake of the current Covid crisis in the country.

But it also left media and advertising professionals guessing the impact that the suspension of one of the biggest cricket tournaments could have on the businesses, especially IPL’s official broadcaster - Star India.

According to a top Disney executive, there could be an immediate effect on Disney+ subscriber addition guidance for the next two quarters. Despite lesser revenue with a low ARPU, Disney+Hotstar contributes significantly to the overall subscriber base of The Walt Disney Co’s biggest streaming bet since Disney’s entry in India last year merging with existing Hotstar service.

While Disney+ paid subscribers have reached 103.6 million subscribers, Disney+Hotstar has nearly crossed around 34.5 million subscribers, which accounts for one-third of the overall base.

The company spokespersons in the earnings call revealed that they expect “fewer net subscribers’ addition in the second half of the year given the Covid-related suspension of the IPL season and the decision to move the Star+ Latin America launch to the fourth quarter.” After the launch of Disney+Hotstar in India, the network had taken the tournament entirely behind the paywall for the first time.

Other than millions of viewers who tune in to TV or OTT platforms to watch one of the biggest cricket spectacles, numerous brands also line up for quick reach and brand recall. Disney+Hotstar had roped in 14 sponsors for IPL 2021 and was expected to rake in higher ad revenue this year. But with the recent turn of events, IPL suspension could hit the advertising revenue too. “You could see a decrease in the ARPU and the subscribers in India if that plays out like we just said,” Christine McCarthy said during the earnings call.

The 14th edition of the IPL was suspended after the bio-secure bubble was invaded by the Covid-19 and several players and team staff contracted the disease. The fate of the tournament now hangs in balance, as BCCI now faces the challenge of finding a suitable window to play the rest of the matches this year. BCCI president Sourav Ganguly has already made it clear that there is no option, but to play the remainder of the season outside India.

“About half of the 60 IPL matches that were expected to be played this season have already taken place. So you're looking at the back half, 30 games to be played. So sure, if they were able to successfully relocate the tournament, we would hopefully see an impact, especially on advertising,” McCarthy replied while asked if rescheduling of IPL would change the outlook for the second half of the financial year.

With the second wave of Covid-19 ravaging the country, and a third wave likely, it remains to be seen how BCCI will navigate through the pandemic and schedule the remaining matches in a Cricket-packed year. The big-ticket events like ICC T20 World Cup are also scheduled for October-November 2021.

“The big issue is going to be when in the quarter and if it overlaps into q4, or if it goes into the first fiscal quarter, which starts for us and the beginning of October. So it would have an impact on it, it just depends on when it would come in. Let's hope they can relocate it,” McCarthy added further.

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