Disney weighs $7B price tag for Indian Cricket
Disney will square off against other media companies on Sunday in its bid to keep the media rights for the popular Indian Premier League, which could go for as much as $7 billion.
Why it matters: Losing the cricket league would likely come with a massive subscriber defection, which would pretty much force Disney to reevaluate its long-term goal of 230-260 million streaming subscribers by 2024.
- Of its 7.9 million new subscribers during the first quarter of 2022, about half of them came from India, Disney execs said, pointing to the start of the IPL season in March.
- At the same time, streaming subscriber growth is no longer seen as the panacea it once was. Some analysts believe that Disney would be better off not paying twice as much as their current deal for such a low-revenue customer segment.
The latest: Along with Disney, Amazon was bidding for the rights but now plans to withdraw from the auction, Bloomberg reported Friday.
- Other companies in the auction include YouTube, Viacom18, Sony India and Zee Entertainment Enterprises, the latter two of which agreed to merge last year.
- Viacom18 is a joint venture among Paramount, Indian conglomerate Reliance Industries and Shankar and Murdoch's Bodhi Tree Systems. Shankar and Murdoch won IPL rights for Fox in 2017.
By the numbers: Those who subscribe to Disney+ via its integration with Hotstar — which is primarily in India, as well as a few neighboring South Asian territories — are the streaming service's biggest segment.
- However, Disney gets far less revenue per subscriber for Hotstar customers.
- Despite making up more than the rest of Disney+'s international subscribers combined, Hotstar subs only accounted for $38.08 million last quarter, compared to $274.3 million from the rest of the world and $280.6 million from the U.S. and Canada.
- The service is priced significantly cheaper in India — a yearly subscription costs a little more than $20.
Details: IPL rights are auctioned off every five years by the Board of Control for Cricket in India.
- The BCCI has already said the minimum bid it will accept is $4.4 billion, up from the $2.5 billion for its last deal.
Be smart: Disney inherited IPL rights as part of its 2019 Fox acquisition, which included Star India and its Hotstar streaming service. This is the first time it will have to bid for them.