Disney Selling Off $10 Billion Part Of Their Business
Disney is planning to sell its lucrative operations in India, valued at around $10 billion. Instead of opting for a segmented approach, the entertainment giant is in advanced talks with Reliance Industries, its major rival in the Indian market, for a full-scale acquisition.
Disney Selling Had Been In The Works
Rumors of Disney’s interest in divesting its Indian assets have been circulating for some time, Reuters reports.
In July, reports suggested that Disney was already in discussions with billionaire Gautam Adani, Kalanithi Maran, owner of Sun TV Network, and private equity firm Blackstone.
However, the company seems to be leaning towards selling a controlling stake in its Indian operations to Reliance Industries, a conglomerate under the helm of Mukesh Ambani.
Reliance Is A Major Player In India
Reliance has been making waves in India’s digital entertainment sector, primarily through its broadcasting venture, Viacom18, and the widely popular streaming platform, JioCinema, which has impacted Disney’s business in India.
Disney+ Hotstar Valued Between $7-8 Billion
Still, Reliance values Disney’s Indian assets, which include the highly sought-after Disney+ Hotstar streaming service and Star India, at an estimated value of between $7 and $8 billion.
This is a significant figure given that, at the time of the Mouse House’s acquisition of Fox, the India operation’s enterprise was said to be worth between $15 and $16 billion.
While the deal is expected to be finalized in November 2023, a definitive decision has yet to be made, and Disney retains the option to reconsider the sale. For now, the two have chosen to remain silent about these developments.
Reliance Has Disrupted India’s Streaming Market
Reliance’s JioCinema has disrupted the Indian streaming market by offering free access to the immensely popular Indian Premier League cricket tournament, whose digital rights were previously held by Disney.
Karan Taurani, Senior Vice President and Research Analyst at Elara Securities suggests that if Reliance were to provide Disney’s content for free, it could dampen revenue growth.
“If Reliance offers Disney content free of cost, the growth rate for the OTT industry will be lower because subscription video-on-demand revenue will not happen,” Taurani explained.
The acquisition also raises questions about regulatory resistance as the “sizeable” overlap between Reliance-owned TV18 Broadcast and Disney may require the shutdown of some channels to gain regulatory clearance.
Disney Launched Hotstar In 2020
Disney launched its Disney+ Hotstar streaming service in India on April 3, 2020. The service combines original content with Hotstar’s existing library of shows and movies, making it a significant player in the Indian streaming market.
Disney+ Hotstar has since become a popular platform for streaming a wide range of content, including Disney, Pixar, Marvel, Star Wars, and local Indian programming.
Hotstar was launched on February 11, 2015, and remained India’s dominant streaming service before Hotstar. The launch of Disney+ Hotstar in India was initially planned for March 29, 2020.
However, it was delayed due to the postponement of the Indian Premier League cricket tournament, which is a major attraction on Hotstar.
Hotstar Has 100K Hours Of Streaming
Hotstar boasts over 100,000 hours of drama and movies in 17 languages and covers every major sport. In 2020, the service had more than 300 million monthly active users.
The potential financial loss incurred by Disney due to the deal remains to be seen. However, the move may save the entertainment giant some money in the long run.
