Star India records 40% growth in ad revenue in FY24

The Walt Disney Company has reported a growth of 2.8% in total revenue, from USD 88,898 million in FY 2023 to USD 91,361 million in FY 2024. Star India recorded a remarkable 40% increase in advertising revenue, jumping from USD 318 million in FY23 to USD 444 million in FY24. This growth was attributed to the airing of two ICC cricket tournaments in 2024, compared to just one in 2023.

The figures were part of the financial data released by the company for the fiscal year ended September 28, 2024,

The total costs and expenses of the company amounted to USD 79,447 million, slightly down by 0.6% from USD 79,906 million in 2023 fiscal. The net income attributable to The Walt Disney Company (Disney) turned out to be USD 4,972 million, marking a whopping 111.2% increase from USD 2,354 million in the preceding year.

Ad spends for the year totalled to USD 6.1 billion, a slightly lower number from USD 6.4 billion in 2023's financial year. The company attributes the decrease in advertising expense for fiscal 2024 compared to fiscal 2023 to a decrease in theatrical marketing costs.

Linear network’s ad revenue declines

The company also reported a 12% decline in advertising revenue from its linear networks segment in FY 2024. According to the company's latest financial disclosures, advertising revenue for the year stood at USD 3,676 million, compared to USD 4,159 million in FY 2023.

Out of this, domestic advertising revenue saw a 15% decline, falling from USD 3,178 million to USD 2,705 million. Meanwhile, international advertising revenue remained relatively stable, witnessing only a 1% decrease, from USD 981 million in 2023 to USD 971 million in 2024.

As per their annual report, the decrease in domestic advertising revenue was due to a decrease of 14% from fewer impressions and 2% from lower rates and further, the decrease in impressions was due to lower average viewership. Lower rates were driven by a decrease in political advertising at the owned television stations. 

Disney’s Linear Networks include ABC Network, Disney, Freeform, FX, National Geographic (73% owned), and eight ABC-owned TV stations. Internationally, it covers Disney, FX, National Geographic (73% owned), and Star branded GECs. The company also holds a 50% stake in A+E Television Networks (A+E), which operates A&E, HISTORY, and Lifetime channels.

Direct-to-Consumer sees growth

The company reported a 14% year-over-year growth in its Direct-to-Consumer (DTC) segment in 2024 which includes Disney+, Disney+ Hotstar and Hulu, driven by strong performances in both subscription fees and advertising revenue.

Subscription fee revenue surged 14%, rising from USD 16,420 million in 2023 to USD 18,796 million in 2024. Similarly, advertising revenue within the DTC segment also experienced a 14% increase, reaching USD 3,707 million, up from USD 3,260 million in the previous year.

As per the company, growth in subscription fees reflected increases of 10% attributable to higher effective rates due to increases in retail pricing and 6% from subscriber growth, partially offset by a decrease of 2% from an unfavorable foreign exchange Impact. 

“Higher advertising revenue reflected an increase of 26% from higher impressions, partially offset by a decrease of 12% from lower rates. The increase in impressions was due to Disney+ and Disney+ Hotstar growth, in part reflecting the launches of the ad-supported Disney+ service domestically in December 2022 and internationally starting in November 2023 and airing more cricket programming on Disney+ Hotstar,” mentioned the annual report.

Moreover, there were two significant International Cricket Council (ICC) tournaments in the current year compared to one in the prior year. Hence, Higher Star India advertising revenue was attributable to the same. 

Disney+ Hotstar average monthly revenue per paid subscriber increased from $0.66 to $0.96 due to higher retail pricing and higher advertising revenue, partially offset by a higher mix of subscribers in lower-priced markets. 

The company mentioned in its annual report that to drive growth at their sports and entertainment businesses, they are, among other things, making strategic investments in their DTC offerings. 

“Although there can be no assurance these investments will be successful, we expect that they will lead to growth in subscription fees and advertising revenues that will more than offset impacts on affiliate fees and advertising revenue from declines in linear network subscribers and the related decrease in average viewership, which we expect will continue,” Walt Disney’s annual report said.

Sports segment delivers mixed results

The advertising and subscription fees revenue showed strong growth for the company in the sports segment. Advertising revenue in the sports segment saw a 12% increase, rising from USD 3,920 million in 2023 to USD 4,388 million in 2024. Subscription fees also grew by 9%, reaching USD 1,650 million, up from USD 1,517 million in the previous year. 

Domestic ESPN advertising revenue grew 10%, reaching USD 3,763 million (up from USD 3,413 million), driven by 8% growth from higher ad rates and 3% increase from sponsorship revenue but offset by a 2% drop in average viewership

International ESPN advertising revenue declined 4%, from USD 189 million to USD 181 million, largely due to an 11% unfavorable foreign exchange impact, which was partially offset by a 5% increase in ad rates and 2% growth in average viewership.

Disney’s Sports segment includes ESPN (80% owned) and Star Sports in India. In the U.S., ESPN operates seven TV channels, ESPN on ABC, and the ESPN+ streaming service. Internationally, it runs ESPN-branded channels across multiple markets. Star Sports leads in India with Star-branded channels, covering major events and leagues.

Bob Iger, CEO of the Walt Disney Company said, “The strategic work we’ve done over the past few years has been entirely focused on growth, the future, and delivering more shareholder value. From improvements in our film slate to the turnaround in streaming and the paths we’re on to grow that business, to increased investments in our parks and expansion in our experiences business to the work we’re doing to turn ESPN into the preeminent digital sports platform, we have numerous strategies in place that position us very well for growth.”

As the company looks ahead, they are leaning more heavily into deploying technology, reaching younger audiences, and finding more ways to operate efficiently. Iger believes they have every reason to be optimistic about their future and their ability to grow and improve shareholder value.

The Walt Disney Company, together with the subsidiaries through which businesses are conducted, is a diversified worldwide entertainment company with operations in three segments: Entertainment, Sports and Experiences.