Disney Says It’s Reviewing Strategy in India

The Walt Disney Company is reviewing its options in India, the world’s most populous country and one of the entertainment industry’s fastest growing markets.

The Wall Street Journal reported on Tuesday that the agency had spoken to one bank to discuss options on how to grow its India business, while also looking at shared challenges. These options could include selling the business or partnering, the paper says.

Connected to VariousA spokesperson for Disney India declined to comment.

Disney has spent a lot of money to buy big market places in India. In 2019, it paid $71 billion to buy 21st Century Fox, with Fox TV assets in Asia and Star pay-TV business in India among the jewels it acquired.

The quality of those businesses has been greatly changed by the global marketing strategy and the competitive Asian market. Disney is currently in the process of closing down most of the East Asian channels it acquired from Fox.

In India, the leapfrogging mobile to video format, which has brought millions of new TV households, has also opened the door for competitors. Some of these are established local players, others are foreign players. The biggest challenger is JioCinema, part of the Viacom18 group, which is backed by Reliance Industries and India’s richest businessman Mukesh Ambani.

Thanks to Fox’s presence, Disney is currently the market leader in streaming in India with its Disney + Hotstar service. However, the loss of important cricket broadcasting rights has weakened the tool this year. WSJ quotes anonymous sources as saying that Disney + Hotstar India may lose 8 to 10 million subscribers in the third quarter.

The Indian advertising market is also low ARPU and high value. Disney+ Hotstar India has a subscription fee of just $0.59 per month per subscriber.

WSJ sources say Star’s total commercial revenue (pay-TV and broadcast) in the fiscal year ending September 2023 is expected to drop by about 20% to less than $2 billion. Earnings before interest, taxes, depreciation and amortization are expected to fall nearly 50% over the same period, from about $200 million last year. Fox made $1 billion EBITDA in 2020.

The current crisis at Star is not the first time Disney has made a mistake in India. In 2012, it acquired UTV, one of India’s largest studios and multiple TV operators. By 2017, it had shut down UTV Motion Pictures, instead focusing on distributing its Hollywood movies.

The Indian media landscape is complex, requiring maturity and patience. Sony has endured a wait of more than 18 months as it tries to merge its major TV channels with the Zee Entertainment company. Another recent move suggests that Warner Bros. Discovery is in no rush to join the race to the bottom of streaming in India by launching Max in the segment soon. In April, instead, WBD announced a multi-year license for HBO, switching allegiance from Star to JioCinema.

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