Indian OTT market is unique due to mass-market pricing and distribution: Bob Chapek

The Walt Disney Company CEO Bob Chapek has said that the Indian video streaming market is unique as the market dynamics are totally different compared to other markets. What makes the Indian market unique is mass-market pricing and mobile-first distribution.

"Well, we have an unparallel collection of entertainment and sports in our Hotstar offering something we're really proud of. But it's a unique market. That's the case around the world, but really is a unique market unique because we have particularly what I'll call mass-market pricing and distribution, but it's a unique market in terms of that distribution because it's really a mobile-first market, which is kind of unusual," Chapek said while speaking at JPMorgan 49th Annual Global Technology, Media and Communications Conference.

Being a low bandwidth market with a preference for local language content, the platforms have to come up with customised offerings. That said, Disney+ Hotstar also offers a large volume of premium content. The Star network creates 17,000 hours of content every year all of which sits on the Disney+ Hotstar platform.

"They have low bandwidth, and so we have to tailor our offerings to match that low bandwidth, and local languages are particularly important there. And so we have to sort of customize for each of those unique elements, but we think that our premium programming evidenced by the sports I referenced especially things like cricket and that local content, we have, I think 17,000 hours a year of local content that we create for Hotstar. And I think that really drives our local affinity and we're excited to launch in Malaysia on June 1," Chapek stated.

He also admitted that Disney being a global company has a tendency to look at a one-size-fits-all strategy. The company, however, understands that this strategy doesn't work everywhere particularly in unique markets like India and Southeast Asia.

"For a company that's got content around the globe, that's beloved like Disney, there would be a tendency to want to do a one-size-fits-all strategy. We know that doesn't necessarily work everywhere and it's why we've got different distribution mechanisms across the world in Latin America versus Asia versus the U.S. versus Europe. That said, maybe the most unique market of all would be Southeast Asia and particularly India given the strong affinity towards cricket and the mobile-first, the low bandwidth, all those things that we mentioned, and that local language customization is absolutely critical. So it's the cost of entry, it's the ante to play the game and we recognized. And I think one of the reasons we've been so successful across the globe in launching Disney+ is we're very, very sensitive to the local market needs and not doing a one-size-fits-all," he elaborated.

Disney+ has crossed 100 million paid subscribers with Disney+ Hotstar contributing 30% to the total subscriber base. "Well, we said from the beginning that the total addressable market is 1.1 billion households. And essentially what we found with our – blowing away our initial guidance is that our penetration is higher. And so when we look at why the penetration is higher, it's pretty obvious not only we’re doing really good against families, but we're way exceeding our expectations on not only in every market but against the general audience families without kids. And we've definitely seen a four-quadrant appeal for our movies where over 50% of our households don't have kids that are subscribed to Disney+."

He also noted that there has been a shift in consumer behavior where people want to stay home and watch a movie. "I think you've got all those things plus our sort of our secret weapon, which is we've not had Disney+ operating in any sense in a full robust way while our parks have been operating, right. Because as soon as Disney+ kind of got really going, our parks shut down because of the pandemic."

Going forward, the company's goal is to offer something new to Disney+ customers every week. "Our goal is something new every week for our guests, and we think that we're going to have a normalized content flow. But like I said, by the fiscal year 2022 and 2023, and those will consist of our originals under our core franchises, our originals under Star General Entertainment internationally, and a tremendous amount of relevant local content that we're going to have across the globe."