Disney May Sell Star India After Losing IPL Rights To Mukesh Ambani’s Jio Cinema

 

Disney is reportedly considering different strategies for its Star India business, which could include partnering with another company or even selling it, marking a shift in dynamics for a significant asset it acquired from Fox. While Disney is still in early talks, there’s no clear indication of the path they might take.

What Happened?

According to a report by The Wall Street Journal, the entertainment titan, along with its competitors, is focusing more on streaming services and moving away from traditional TV platforms, leading to considerable spending on deals, content, and tech across the globe.

Disney actively saw Star India as a key piece in its global streaming expansion plan when it bought entertainment properties from 21st Century Fox for $71.3 billion (₹5.87 lakh crore) in 2019.

However, Star India’s success took a hit last year when Disney lost streaming rights for the popular Indian Premier League cricket matches to Mukesh Ambani‘s Jio Cinema. This loss impacted Star’s Hotstar mobile streaming service, as it made the service less appealing to many subscribers.

Analysts predict that Hotstar could lose up to 10 million subscribers in the third fiscal quarter.

Despite Disney’s earnings from its streaming services in India being lower than in the U.S., the corporation is still striving to make its streaming business profitable by Sep. 2024. Amid these challenges, the company continues its cost-cutting efforts and is set to announce its quarterly earnings on Aug. 9.

What Does It Mean?

The possible sale of Star India could signal a major shift in Disney’s strategy for the Indian market, where it has been operating for over two decades. Star India is one of the largest media conglomerates in the country, with over 60 channels in eight languages, reaching more than 700 million viewers every week.

Star India also owns Hotstar, which is one of the leading streaming platforms in India, with over 300 million monthly active users. Hotstar offers a mix of live sports, movies, TV shows, and original content, catering to a diverse audience.

However, Hotstar faces stiff competition from other players in the streaming space, such as Netflix, Amazon Prime Video, Zee5, SonyLIV, and Jio Cinema. The latter has been aggressively acquiring sports rights, including the IPL and other cricket tournaments, which are a huge draw for Indian viewers.

Jio Cinema is backed by Mukesh Ambani, the richest person in India and the chairman of Reliance Industries Limited (RIL), which owns Jio Platforms, a digital services company that operates Jio Infocomm, the largest telecom operator in India with over 400 million subscribers.

Jio Cinema is part of Jio’s broader vision to create a digital ecosystem that offers a range of services such as e-commerce, education, health care, gaming, social media, and entertainment. Jio has also partnered with Google and Facebook to leverage their technology and reach.

What’s Next?

Disney has not made any official announcement regarding its plans for Star India. It is possible that it may decide to keep the business or find a strategic partner to share the costs and risks. It is also possible that it may sell it to another company that is interested in expanding its presence in the Indian market.

Some of the potential buyers could include Amazon, which has been investing heavily in India and has a strong e-commerce platform; ViacomCBS, which owns Paramount+ and has a joint venture with Network18 in India; or Sony Pictures Entertainment, which owns SonyLIV and has recently acquired Zee Entertainment Enterprises Limited (ZEEL), one of the largest broadcasters in India.

Whatever Disney decides to do with Star India, it will have significant implications for the future of the media and entertainment industry in India, which is one of the fastest-growing and most competitive markets in the world.