Disney Star and the building of a sports bouquet

K. Madhavan, president, Walt Disney India
K. Madhavan, president, Walt Disney India

Summary

K. Madhavan, president of Walt Disney India, speaks about Disney Star’s continued investments in sports, value in understanding the viewers and the need for light-touch regulation

K. Madhavan, who was named president of Walt Disney Co. India and Star India in April, is a reticent media executive, unlike his high-profile and outspoken predecessor Uday Shankar. The driving force behind Asianet’s dominance in the Malayalam market as its chief executive, Madhavan joined Star India in 2009 and built its regional portfolio as the network’s head of south India. In the past 10 months, as Disney president, Madhavan has remained low-key and has quietly worked to expand the company’s TV broadcasting and streaming businesses. In a conversation, he spoke about Disney Star’s continued investments in sports, value in understanding the viewers and the need for light-touch regulation. Edited excerpts:

You were in the Star India system for more than a decade. How has the transition been from Star to Disney?

When you talk about Fox that was first here, that was a promoter-driven company, if not an individual-driven company. When you come to Disney, it’s a completely professionally managed company. The largest shareholder has less than 6% (equity stake). It’s totally driven by professionals, so it’s a different culture. The good thing is that the merger was very smooth. As far as we’re concerned, it happened without any problems.

You have not engaged with the media in the past year. We’d love to know what you have been working on.

We grew considerably, especially in the last year. We experienced immense growth in all verticals. One year back, or two years back, our market share was around 17-18%, and now it is close to 30%, whereas the No.2 could be 16-17%. This 30% is the viewership share. Ad revenue share could be more than that. Viewership-wise we have grown. The beauty of our network is it’s not limited to one market. Barring one or two markets, we are doing extremely well, and we are No.1 in all.

Tell us what you’ve been concerned about. Any weaknesses?

You see, I’m also president of IBDF (Indian Broadcasting and Digital Foundation) and chairman of the Confederation of Indian Industry (CII) media and entertainment national committee. So, for our industry, at the macro level, we are finding it difficult to do our business with many restrictions and limitations. Our request to the government, regulator and policymakers is that we need light-touch regulation. Unfortunately, there are a lot of restrictions. There is a cap of 12 (The Telecom Regulatory Authority of India, under a new tariff order, capped the maximum price of a channel in a bouquet at 12). You know that we are fighting it. Nowhere it is fixed like this.

In new verticals such as sports, there is a huge investment. If I am investing X billion in IPL (Indian Premier League) media rights, and if you ask me to sell (channel) at 12, that’s not possible. There are certain channels in the US that are selling at $100 per month.

Two major broadcasters—Sony and Zee—are set to merge. What will it mean for the industry and Star?

First of all, it is a developing market. We are still in the developing phase. We have around 320 million households in India, and only 200 million have televisions. Of this, only 120 million households have paid connections or pay-TV. So, there is huge potential to grow. As for us, I would say we have a great team. A very, very talented, passionate team. The second point is we have been here for the last 30 years. We are part of this socio-cultural entertainment sector. Third, competition is nothing new for us, and you can see that whether it is HSM (Hindi-speaking markets) or regional markets—where we were No.3 or No.4, we’ve moved to No.1. So, any healthy competition, we are not worried, it’s welcome.

Will you accelerate your investments here?

We are investing heavily into this market, whether it is linear, non-linear or sports. In the last IPL bidding, we paid some 2X to 3X of what it was earlier. At that point, the whole world said that it was too high. We are continuing that process. We are investing heavily in content. We believe content is king.

What can we expect your approach to the IPL auction to be?

We remain bullish on sports. We work with a business plan around this. We are in investment mode. (We will bid) if it (IPL) is within my limit … and that limit is very aggressive. We have around 70-75% market share in sports. We built this market. The whole credit goes to the Disney Star network, whether it is cricket, football or kabaddi. We have a long-term vision, and there is no going back on that.

How much money have you made from IPL?

Certain investments are always in the investment mode. You know the meaning of that. So, we are bullish about this sports business in India, and we have a long-term view. We don’t look at it on a monthly basis or annual basis.

What formula do you use to take your channels to the top in different markets?

It’s basically the ability to understand viewers’ tastes, behavioural changes and demands. Especially on the linear side, the remote is the worst enemy for me. While 99% of viewers in theatres sit and watch the film as they have paid 400- 500 (for ticket), in my case, the time given by a viewer is not more than three to five minutes. He moves away immediately and will not even come back. So, it’s a very interesting space to understand them and give them what they want. I should visualise what you want. That’s it. That’s the formula.

Speaking of storytelling, Netflix and Amazon Prime have garnered attention for their creative decision-making, be it the movies they have acquired or originals they have commissioned. Would you say that Hotstar originals have not had that kind of impact?

In 2021, out of the top 15 OTT (over the top) shows, nine are from Hotstar. What more do you want? This is the Ormax data. We don’t make much of a noise about what we are doing.

But qualitatively, are you satisfied with the creative decision-making at Hotstar?

I go by ratings and viewership. That is my Bible. I don’t ask anybody what your view is. I don’t go by perception.

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