How Many Subscribers Disney Could Lose Due To Setback In India

In the e-auction for the multi-year rights to the Indian Premier League cricket tournament, a joint venture between Paramount Global (NASDAQ: PARA) and Mukesh Ambani's Reliance Industries won the streaming rights, outbidding incumbent holder Walt Disney Company (NYSE: DIS).

The loss of IPL streaming rights may have cost Disney 20 million subscribers, Bloomberg reported, citing estimates from Media Partners Asia. This could leave Disney+ streaming service facing an uphill task to achieve the global subscriber goal of 260 million by 2024.

About 50 million of Disney+'s total subscribers of 138 million are accounted for by Disney+ Hotstar, which the company offers in India and other South Asian countries, Bloomberg noted. Cricket was primarily responsible for the huge subscriber growth in the region, it added.

Disney, however, has secured the broadcast rights by coughing up $3 billion.

Related Link: Why This Analyst Thinks Disney And This Company Are Uniquely Positioned In The Media Space

A Neutral Outcome? The IPL auction results in a mixed outcome for Disney, KeyBanc Capital Markets analyst Brandon Nispel said. TV viewership is shifting broadly from linear Pay TV to streaming, offering secular challenges, he added.

The analyst, however, sees some benefits with just continuing the TV rights due to the importance of the IPL to the Star ecosystem. Given Disney could have the highest viewership due to the IPL rights, it should be able to monetize the rights fairly effectively through advertising, he added.

"In addition, DIS can use the larger Pay TV base of customers as a gross add funnel for Disney+ Hotstar," the analyst said.

Price Action: Disney shares were rising 0.68% to $94.86 in premarket trading on Wednesday, according to Benzinga Pro data.