How Disney+ Hotstar came to rule the OTT Industry in India?

Around 13 million people were watching the match on Hotstar on Sunday. After the match, Indians did not only appreciate the players for their outstanding performance but also appreciated how seamlessly Hotstar streamed the match on its platform even with a lot of traffic on the app.

Disney+Hotstar has been a massive success in India. Even in the fiercely competitive Indian OTT market Hotstar has managed to get a lion’s share of 29% in the total viewership. It had the highest number of paid subscribers - 54 million, higher than the combined paid subscribers of Amazon Prime ( 17 million ) and Netflix ( 5 million ).

The feat is remarkable as even a global giant like Netflix is struggling to make a mark in India.  Despite slashing its subscription price, Netflix, which introduced Indians to international OTT entertainment, is yet to establish itself.

How has Hotstar managed to rule the OTT Industry?

Play a Sport

Indian's love for sports is unmatched and Hotstar 

Hotstar since its foray into digital media has focused on sports streaming. In 2017, it acquired the streaming rights of IPL for TV + Digital for 5 years for  Rs. 16, 347 crores. 

The user base of Hotstar would balloon disproportionally in the two months of IPL.

In its most recent financial report, Disney said that about half of its 7.9 million net new subscriptions in the quarter came from Indian customers, many of whom signed up just as this year’s IPL cricket season began in late March.

Also, According to some sources, the company generates 

The focus of Hotstar did not just include cricket, but also kabaddi, football, hockey, and badminton. For example, in 2015, Star India bought 74% of Mashal Sports, which owned the Pro Kabaddi League, which is one of the most watched sports leagues in India.

AVOD model

While Amazon and Netflix have resorted to a subscription - based model wherein everything is behind a paywall and you have to pay a significant amount to get the subscription, Hotstar went for a different model.

Hotstar priced its plans as cheap as Rs. 399/year, while it also sprinkled some ads between the content. Pricing it low was necessary for Disney because of the price-sensitive audience. Also, advertisement revenue would make up for fewer subscription fees.

Disney though has changed its pricing now but its strategy remains the same. It would continue to have ads between the content.

Many users were worried that advertising-based video-on-demand (AVOD) models would cause OTT players to lose money but according to Deloitte's TMT Predictions 2022 report, AVOD is expected to generate more revenue than subscription-based video-on-demand (SVOD).

Hotstar's success inspired Netflix in India to announce that it would display advertisements on the platform.

Partnerships

Hotstar, which launched in 2015, has long-term deals with telcos like Reliance Jio for data-plus-streaming bundles. Hotstar's VIP plan, which includes live sports, could be accessed by Jio users for just Rs 50 (US$0.7) per month. Originally, Hotstar offered free content, including the IPL, to Jio users in an effort to make money from advertising. The partnership gave Hotstar access to billions of Jio users. Hotstar offered them free content till they were hooked to the platform, and then enticed them to pay a little amount to watch the content. According to a company source, a large segment of Hotstar users are Jio subscribers.

Hotstar’s success could be attributed to its multiple strategies. Whether it would sustain its leadership in the industry is the question of the hour. After Disney acquired the company in 2017, things are not the same. A lot of people in the senior management left the firm after the acquisition. One of the most notable exits was of Uday Shankar, who supposedly was the driving force behind the success of the digital arm of the company. He has partnered Ambani’s Viacom18. After his exit, things have changed drastically for Disney, the company also lost the streaming rights of IPL to Viacom18.

It is for the time to tell, if Hotstar would continue to dominate the OTT industry in India.