Disney Star, the country’s largest broadcast media company, finds itself in an unwanted spotlight, following a report in the Wall Street Journal (WSJ) on Wednesday of strategic business options that the parent is considering for its India business. On the table is a proposal to either sell the India unit or set up a joint venture, the WSJ said, adding that talks were in a preliminary stage and were being handled out of the US headquarters.
Disney’s India business comprises the Disney+ Hotstar streaming service and Star India, which it took over when it acquired the entertainment assets of 21st Century Fox in 2019. Star India, which follows an April to March accounting year, reported a revenue of Rs 17,480.62 crore in FY22, a growth of 38% year-on-year, according to Capitaline. Net profit jumped 54.5% versus the previous year to Rs 1,213 crore. Financials for FY23 were not available on Capitaline.
Meanwhile, Novi Digital Entertainment, a subsidiary of Star India, which runs Disney+ Hotstar, reduced losses to Rs 343.16 crore in FY22, compared to a loss of Rs 600.77 crore the previous year. The total income of the OTT platform almost doubled to Rs 3,259 crore in FY22, from Rs 1,794 crore in FY21, data from business intelligence platform Tofler shows.
The WSJ report, however, notes that both the television and OTT divisions of Star India will see a drop in revenue as the company struggles in the aftermath of a loss of the streaming rights of the Indian Premier League (IPL) for the 2023-27 media cycle. The company, however, retained the television rights of the IPL for the period and has managed to successfully defend its viewership against Viacom18’s digital onslaught.
Disney Star declined comment when contacted for a view on the parent’s strategic plans.
In the last two quarters, Disney+ Hotstar has lost nearly 14% or 8.4 million of its paid subscribers, Disney’s results have showed, as streaming rights of the Indian Premier League (IPL) for the 2023-2027 media cycle moved to Viacom18’s JioCinema. Disney’s June quarter results will be disclosed next month. The company follows a September to October accounting year globally.
“Viewership for digital platforms is growing as digital adoption grows fast,” says Karan Taurani, senior vice-president, research at brokerage Elara Capital. “That is one aspect that is not working in favour of linear TV in India. The second aspect is that the ad environment in TV is weak, with little respite due to higher subscription revenue on the back of a new tariff order price hike,” he said.
Rivals Sony and Zee are seeking approvals for a proposed merger, which will create a $10-billion entity. While Viacom18 closed a $1.84-billion transaction in April, led by Reliance group entities who contributed $1.31 billion in cash and Bodhi Tree which brought in $523 million to the deal, the company said.
Viacom18 has also given a boost to its English language content on JioCinema, nabbing the HBO titles let go by Disney in April, as well as adding NBC Universal’s content slate into its fold in May. It has been subsequently beefing up content across sports, general entertainment and movies across languages to draw viewership across segments.
Last week, Reliance Jio announced that its new 4G-enabled feature phone would come pre-loaded with the JioCinema app in a boost to the over-the-top (OTT) platform.
“After the free streaming of the IPL, the launch of JioBharat is definitely key for JioCinema,” says Sajal Gupta, chief executive officer of Gurugram-based Kiaos Marketing. “Access to a new market opens up a plethora of opportunities for the OTT player,” he says.
This will include pushing more regional content, including movies and shows, as well as making available more language feeds for key properties such as IPL and other sporting events, Gupta says.