Asia Cup, ICC World Cup 2023: Disney betting big on its free cricket model amid streaming war with other players

In a bid to counter its competitors ahead of a busy year in cricket, Walt Disney is trying to revive the fortunes of its streaming business in India by offering free cricket on smartphones. In June this year, Disney+ Hotstar announced that Asia Cup and ICC Men’s Cricket World Cup tournaments will be made available as free-to-view to all mobile phone users accessing their application. 

The streaming service platform is trying to encash the strategy so that it can boost advertising revenue and offset the impact of a subscriber exodus, Reuters reported on Tuesday. 

Making cricket free on mobile will help "450 million-plus customers to tune in" over 48 days of the 50-over World Cup that is being hosted by India, compared to 300 million in the last World Cup in 2019, a Disney report, Festival of Cricket 2023, stated. 

The company is eyeing a new record of 50 million concurrent viewership during the World Cup, double the 2019 number, the document added.  

That will also be 56 per cent higher than what Ambani's JioCinema clocked during this year's IPL finals in May. 

Disney+Hotstar, which caters to viewers in India and southeast Asia, lost 4.6 million paid viewers during the January-March quarter, bringing down its subscriber base by 8 per cent to 52.9 million, as per earnings release published in May.  

The company had said the Indian Premier League (IPL) drove Disney’s initial growth in cricket-crazy India. Losing the rights to stream the tournament has proven costly for the company. 

Mukesh Ambani-led JioCinema, the streaming service by Reliance Industries, netted a record number of viewers for the Indian Premier League final in 2023. JioCinema, which was the official streaming partner of the IPL 2023, offered free streaming of the cricket tournament.  

Reliance's Viacom18 won the IPL digital streaming rights from 2023 to 2027 for around $2.9 billion, rights which Disney previously held. 

Ambani’s media venture outbid companies including Disney to clinch the digital rights to IPL. 

With subscriber exits accelerating and slashing the user base by a third between October last year and July, the entertainment giant's financial performance in the country is only expected to come under more pressure, the report said. 

Disney internally recognises it misjudged Indians' willingness to pay - people signed up for Hotstar when it had IPL, but didn't stick around to buy more premium plans to watch other content, two sources told Reuters. 

“We were bullish on Indian subscribers' propensity to pay. That's not worked out,” said one of the sources. “Free cricket is the only bullet left.” 

Rights for ICC tournaments 

Disney renewed its rights to show the International Cricket Council's tournaments in India from 2024 to 2027 by paying around $3 billion. It retains digital streaming rights. But the TV broadcast rights were given to Zee Entertainment for around $1.5 billion, a source told Reuters. 

The media company has assessed that going back to the free-cricket model on mobile phones and tablets is the strategic pivot needed to shore up revenues.  

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It calls the move a new "hybrid model" to drive advertising revenues by raising smartphone viewers, while targeting new subscribers for the Hotstar TV app where cricket will remain under paid plans. 

This strategy is about "how we build a model which will allow us to drive two revenue streams more meaningfully," Sajith Sivanandan, head of Disney+ Hotstar, told Reuters. 

Sivanandan added the company would target advertisers with budgets as low as Rs 200,000.  

Another new initiative would be interactive ads connecting watchers to a brand's WhatsApp chat to enable purchases of the products. 

The Disney report showed a new deal struck with Coca-Cola for boosting subscriptions. QR codes on an estimated 400 million Coke bottles will offer a Hotstar trial, with Disney hoping 80,000 people will then take paid plans. 

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