Home / Industry / Media /  Bob Iger’s return to Disney may mean cost checks in India biz

Bob Iger, who was reappointed chief executive of the Walt Disney Company in a surprise move last week, is expected to bring back growth for the entertainment giant’s India business under Disney Star by controlling costs including a relook at its huge investments in buying sports rights.

Iger’s return less than a year after his exit comes at a time when his successor Bob Chapek has been under fire for Walt Disney’s underwhelming performance.

Disney Star Private Ltd is a wholly owned subsidiary of The Walt Disney Company India. The network runs more than 70 TV channels in eight languages, including Star Plus, Vijay TV and Star Sports, and reported a consolidated revenue of 12,664 crore fiscal ended March 2021.

In June, Disney Star spent 23,575 crore to buy television broadcast rights for the Indian Premier League cricket tournament for five years beginning 2023 but lost the coveted digital media rights to Reliance-owned Viacom18.

Consequently, Disney Star’s streaming platform Disney+ Hotstar in India (and a few other Asian countries) has seen its growth rate slow down. In the September quarter, Hotstar brought in a little less than 3 million subscribers, a dip from the 8 million it added in the June quarter.

Media industry experts said the big challenge and opportunity for Iger will be to ramp up local offerings on Hotstar which, so far, hasn’t been as aggressive as rivals Netflix and Amazon Prime Video. They added that he is well-versed with the Indian market where Hotstar brings 40% of Disney+’s global subscribers, having closed the 21st Century Fox Inc acquisition in 2018.

Disney India did not respond to Mint’s queries on the impact of Iger’s return on the company’s India strategy.

Betting on genres other than sports could be the way forward for Disney in India given that content spends are rocketing, said Karan Taurani, senior vice-president at Elara Capital Ltd.

“There are no compelling properties other than the IPL and much depends on India’s performance so the returns are very low at least for digital. So they will have to take a different approach there," Taurani said.

Sadanand Shetty, a media investor who represents multi-asset family offices agreed. “Local originals are a significant draw for any platform and critical for Hotstar at this point that hasn’t been as aggressive as rivals like Netflix and Amazon Prime Video. Iger may relook at that strategy especially considering the streaming growth that has happened in the past two years," Shetty said.

“As far as India goes, Iger is likely take a closer view on costs, resulting in fewer or more-tightly budgeted shows for streaming and less crazy bidding for sports rights. The next two years are going to be quite tight given the economic environment in the US. This could also mean reorganization from a leadership perspective though his first focus is going to be the US and he would look at India only in the second year," said a media analyst declining to be named.

While the ad-supported model already works for Disney+ Hotstar in India, the person said it would become more dominant globally given that subscription revenues are no longer being seen as sustainable.

ABOUT THE AUTHOR

Lata Jha

Lata Jha covers media and entertainment for Mint. She focuses on the film, television, video and audio streaming businesses. She is a graduate of the Columbia School of Journalism. She can be found at the movies, when not writing about them.
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