Astro’s revenue per user may improve on Disney+ Hotstar

Disney+ Hotstar will be the latest video streaming platform in Malaysia and will be available from June 1.

KUALA LUMPUR: Astro Malaysia Holdings Bhd’s collaboration with The Walt Disney Company to offer Disney+ Hotstar could help improve average revenue per user (Arpu) for the pay-TV operator.

With the appointment of Astro as the official distributor of the streaming services, Disney+ Hotstar will also be made available to its Movies Pack customers for an additional RM5 per month.

Its non-Movies Pack subscribers, meanwhile, may access the streaming service via other bundles to be made known later.

This follows news last week that Disney was said to be considering shutting down the majority of its TV channels in South-East Asia and Hong Kong later this year as it plans to shift its focus to the direct-to-customer business model.

Disney+ Hotstar will be the latest video streaming platform in Malaysia and will be available from June 1.

Non-Astro customers will need to pay RM54.90 for three months to access that service.

According to Public Investment Bank, the tie-up could improve Astro’s Arpu as subscribers may opt to sign up for the new streaming services under the Movies Pack.

However, the research house also noted that there was a possibility that existing Astro subscribers may also opt for direct subscription at Disney+ Hotstar given the attractive monthly rate.

Astro has given assurances that the collaboration will be positive for earnings going forward.

“It has been reported that Disney will migrate its content from Astro to the Disney+ Hotstar app and save Astro content cost.

“However, Astro stated that it would reinvest them into local content.

“Coupled with more bundles going forward, Astro hopes to stabilise churn and subscription revenues, ” said Maybank IB Research in a note.

Maybank has maintained its earnings estimates for the company and its target price on the stock at RM1.33 for now.

“We continue to like Astro for its high dividend yields and as a consumer sentiment recovery play, ” it said.

Maybank has a “buy” call on Astro.

Public Investment has, likewise, kept its earnings forecasts unchanged at this juncture, given the limited earnings upside from this partnership.

The brokerage has an “outperform” rating on the stock with a target price of RM1.20.