Disney+ has a looming subscriber problem

Disney+ has enjoyed positive optics over the last year as it’s continued to narrow its subscriber gap with Netflix.

However, not all Disney+ subscribers signed up to get Disney content. Roughly 36% of Disney+ subscribers are actually subscribed to Disney+ Hotstar, the company’s Indian streaming service, per Variety.

Disney+ Hotstar…

… is anchored not by Disney classics, but cricket. Specifically, the company holds the streaming rights for the Indian Premier League — the most popular cricket league in India.

But that’s about to change:

• Disney bought the rights to IPL Cricket in 2018 in a five-year agreement worth $2.1B, and the rights expire in 2023
• Viacom18 — a joint venture between Paramount Global, Reliance Industries, and Bodhi Tree Systems — purchased the 2023-27 streaming rights to IPL Cricket for $2.6B

On the bright side…

… Disney+ should see a pop in its average revenue per user (ARPU):

• Disney+ subscribers outside of India pay $6.32-$6.35 per month
• Disney+ Hotstar subscribers in India only pay 76 cents per month

Some analysts predict losing IPL rights could result in 20m-30m churned subscribers for Disney+. With a goal of 230m-260m subscribers by 2024, hopefully that silver lining is enough to keep investors happy.