Disney+ Booms in India, Where Subscribers Pay $20 a Year or Less

The growth ofWalt Disney Co.’s streaming service in India and Indonesia has been staggering, with the countries now accounting for more than a quarter of its 73.7 million customers globally.

What’s less staggering is the price most of the subscribers pay: Even the premium plan is just $20 a year. That’s a fraction of the $70 that U.S. customers shell out and illustrates the challenge the company faces as it takes its streaming platform to more countries.

The growth of Disney+, which launched a year ago, has far exceeded the expectations of both Wall Street and the company itself. It was abright spot in Disney’s latest quarterly results, released Thursday. But keeping up its pace will mean tapping markets with less spending power.

“If you get enough sheer volume, you can make it work even at a relatively low price per subscriber,” said David Heger, an analyst at Edward Jones.

The company serves India and Indonesia with a product called Disney+ Hotstar, a rebranded platform born out of a business acquired from Fox last year. Those two developing countries now represent 18.4 million Disney+ subscribers.

Hotstar was rechristened with the Disney+ name on April 3 in India. The product launched in Indonesia in September. Since the streaming platform had 33.5 million subscribers globally at the end of March, that means the two countries accounted for almost half of new customers over the past six months.

India, with its massive population, has the potential to become the biggest market for Disney+, Heger said.

“When you look at a country with 1.3 billion people, your potential is significant,” he said. An additional 270 million people live in Indonesia.

Hotstar originally launched in 2015 as an ad-supported service and later added a subscription component. It features movies, TV shows and sports. The company described itself before the launch earlier this year as having over 300 million monthly active users.

In April, Disney introducedthree levels of service: free, VIP and premium. The VIP version, which includes live sports, Indian movies and Disney films dubbed in local languages, costs 399 rupees per year, or about $5.40. The premium version, which features Disney+ originals and English-language content, costs $4 a month or $20 per year.

Disney said its average revenue from Disney+ subscribers is $4.52 per month. Take out the cheaper Disney+ Hotstar plans, and the average jumps to $5.30 per month.

Unlike in the U.S., cricket matches are a big draw for Disney+ in India. The latest season for the India Premier League helped drive subscriptions last quarter, Disney said Thursday.

Paying for those rights has presented its own pricing challenge. In last year’s third quarter, Disney’s Indian media business posted a $60 million loss due to rising costs for cricket.

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