15 Oct

Disney Keeps Pressure on Netflix, Takes Hotstar Global

WRITTEN BY Ruchi Gupta

Walt Disney-owned India-based subscription video service Hotstar has begun rolling out globally. The service has launched in the US, Canada, and the UK, and aims to enter more international markets. Disney (DIS) came to own Hotstar alongside its parent, Star India, through its $71.3 billion purchase of Fox assets. Disney’s introduction of Hotstar to international markets could pile even more competitive pressure on Netflix (NFLX).

Disney spreading competition for Netflix to more markets

Hotstar, Netflix’s biggest obstacle in India, dominates the subscription video market there. It finished last year with 3.0 million subscribers in India, while Netflix had just 1.2 million.

Netflix recently introduced a cheaper plan in India, hoping to attract more subscribers in the country. But now Netflix has to face Hotstar internationally as well. Hotstar’s move is a blow to Netflix, which has come to rely on India, the UK, and Canada to support its growth. In the second quarter, for instance, international markets accounted for more than 100% of Netflix’s subscriber additions, as the company lost about 130,000 subscribers in its domestic US market.

Hotstar joins Disney+ in challenging Netflix for subscribers

Hotstar is Disney’s latest weapon against Netflix. Its other weapon, Disney+, is set to roll out next month. In a bid to take customers from Netflix, Disney has priced its subscription video service competitively. Disney+ is set to cost $6.99 per month, whereas Netflix’s basic and standard plans cost $8.99 and $12.99 month, respectively. Hotstar is slated to cost $10 per month in the US, making it cheaper than Netflix’s flagship plan.

Furthermore, Disney isn’t the only competitor to undercut Netflix. Apple has priced Apple TV+ well below Netflix’s plans.

The price wars fanned by Disney and Apple couldn’t come at a worse time for Netflix, which missed its second-quarter subscriber growth target because customers rejected its price increases. A KilltheCableBill study shows one-quarter of US Netflix subscribers feel the service has become too expensive. In addition to waging a price war, Disney has blocked Netflix from advertising on its television networks.

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