Disney+ Hotstar recently revealed that the suspension and possible rescheduling of IPL 2021 will have a significant impact on their advertising and subscription revenues. During the Q2 earnings call, Christine McCarthy, Vice President, and CFO told analysts (via Insidesport) that Disney+ Hotstar revenues in India will be impacted by the decision of when and where IPL 2021 Phase 2 gets relocated.
“The other thing that’s going to happen here is with the absence of the IPL games in India, that will also have an impact on advertising revenue. So, you could see a decrease in the ARPU and the subs in India if that plays out like we just said”
Disney+ Hotstar comprised one-third of Disney’s 104 million paid subscribers in Quarter 2. This means that Disney+ Hotstar had 34.67 paid subscribers in Q2 compared to 28.47 million in Q1 for the quarter ended December 2020.
It is worth noting that Disney’s financial calendar runs from 1st October to 30th September. Speaking about the rescheduling of the cricket tournament which may have to be relocated to a different venue later this year, McCarthy said that the remaining IPL matches taking place later during the year will have a positive impact on the direct-to-consumer (DTC) segment.
DTC revenues for the quarter increased 59% to $4 billion and operating loss decreased from $800 million to $300 million. The decrease in operating loss was due to improved results at Hulu, and to a lesser extent, at ESPN+.
As per McCarthy Disney+ Hotstar’s revenue and revenue took a hit in the JFM quarter due to the timing of IPL matches and the impact of COVID-19. In Q2, Disney’s International Channels revenues decreased by 4% to $1.3 billion, but their operating income increased by 27% to $348 million. The increase in operating income was driven by lower programming and production costs and an increase in advertising revenue.
Advertising revenue growth increased primarily due to an increase in average viewership and the timing of BCCI cricket matches which generally take place in the first quarter, or in the second quarter this year due to COVID-related timing shifts. The decrease in affiliate revenue was due to channel closures and an unfavorable foreign currency impact.