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General News Disney set to take driver’s seat in India with the addition of Star, Tata Sky
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[Image: the-walt-disney-company-cover.gif]MUMBAI: After previous unsuccessful attempts to bolster its presence in India, The Walt Disney Company has finally struck gold in one of the world’s fastest-growing media & entertainment (M&E) markets with the addition of broadcast major Star India and India’s second largest direct to home (DTH) platform Tata Sky courtesy its acquisition of a large part of Rupert Murdoch-led 21st Century Fox.

In a stock deal valued at $52.4 billion, Disney has acquired a major chunk of Rupert Murdoch’s entertainment empire comprising Twentieth Century Fox, Twentieth Century Fox Television, FX Productions, FX Networks, National Geographic Partners, Fox Sports Regional Networks, Fox Networks Group International, Star India and Fox’s interests in Hulu, Sky, Tata Sky and Endemol Shine Group.

The combination of The Walt Disney Company and most of 21st Century Fox will not just change the dynamics in the US and Europe it will also bring Disney in the driver’s seat in India in one fell swoop.

Star with its highly profitable Hindi and regional entertainment business coupled with soon to break-even sports business and the fast-growing digital business comprising Hotstar will add muscle to Disney in the Indian market. Add to that a large distribution platform like Tata Sky although the company will get own only 30% stake in this company.

On its own, Disney has been a mid-scale player in the Indian market despite the big bang acquisition of Ronnie Screwvala’s UTV Communications for Rs 2,000 crore. It had earlier acquired kids channel Hungama TV from UTV.

The UTV acquisition allowed the American company to strengthen its local movie production business in India besides adding a few TV channels and a digital business, however, it was not enough to compete with big players like Star, Zee, Sony, and Viacom18 in the high stakes Indian M&E market. Screwvala eventually left the company to start new businesses in areas like sports and digital.

Disney’s biggest drawback in India was the lack of a general entertainment channel which would have allowed it to compete with the big boys of the broadcast sector. The company’s broadcast business in India is limited to kids, youth, and Hindi movie channels. It also scaled down its local movie production business after suffering a string of losses on high budget films.

However, the addition of Star India will change the game for the company in India. Star India owns and operates 69 channels in eight languages. The company is a leading player in most of the genres including Hindi GEC, Hindi movie, regional, English entertainment and sports. Star’s video on demand (VoD) service Hotstar is also the biggest digital platform in the country.

Disney, on the other hand, will add to Star’s capability by bringing a huge movie library and a strong kids TV portfolio.

Disney, which is a big player in sports through its popular brand ESPN, will also get to own marque sports properties like Indian Premier League (IPL), which Star had acquired recently for a whopping $2.5 billion, besides ICC, BCCI, Pro Kabaddi, and Indian Super League (ISL) among others.

Incidentally, ESPN and Star Sports were JV partners in Asia and India through ESPN Star Sports till 2012 until Fox decided to buy-out the former’s stake for $335 million. The deal led to ESPN’s exit from the Indian market for three years. It re-entered the Indian market in 2015 through a content and brand licensing deal with Sony Pictures Networks India to launch a co-branded channel Sony ESPN and a digital platform ESPN.in.

Having acquired Star in the global deal, Disney would look to launch ESPN as a full-fledged sports network in India to add power to the already strong Star Sports network. Sports will be one of the major areas where Disney will try to exploit synergies with Star.

Another area of synergy can be the movie production and distribution business. With 20th Century Fox, Fox Searchlight Pictures, and 20th Century Television Production, Disney will have access to popular movie franchises like Avatar, X-Men, Deadpool, Ice Age, and Planet Apes apart from popular TV franchises like The Simpsons, Modern Family, Homeland and The Americans.

Together with franchises owned by Disney’s content studios like Walt Disney Studios, Pixar, Marvel, and Lucasfilm, the two can cash in on the growing popularity of Hollywood films in India. Disney UTV and Fox Star India can also scale-up the local film production business together.

The combined might of Disney and Fox can also be used to bolster the English entertainment and movie channels and Hostar’s premium offering. The VoD service already has a lot of Disney content as part of its premium offering.

Disney, which is looking at a big direct to consumer play in the US, will have Hotstar and Tata Sky to assist it in reaching the consumers directly in the Indian market. Both are rapidly growing businesses.

However, one critical question that is unanswered is the future management team of the Disney-Star business.

Currently, The Walt Disney Company India is helmed by Mahesh Samat, who is the MD of South Asia of The Walt Disney Company while Star India is led by its charismatic chairman and CEO Uday Shankar, who was recently elevated to president of 21st Century Fox Asia unit.

Source:

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Airtel Digital HD Recorder / Kerala Vision Digital TV
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