Walt Disney is exploring options to sell or find a joint venture partner for its India digital and TV business, a source with direct knowledge said on Wednesday. The talks are in a very, very nascent stage, and it remains to be seen how the process will pan out, the person added. “Talks have begun internally (on) what makes sense to do,” the person said, adding executives were driving discussions at Disney headquarters in the U.S. The company did not respond to a request for comment.
The world’s most populous country is a challenging market for a media giant. In the last decade, the number of Indians with broadband access has exploded. That has opened up millions of new TV households and prompted a shift to online streaming platforms.
But Disney’s Hotstar faces competition from free rivals like JioCinema, backed by Reliance Industries, the company run by Asia’s richest man Mukesh Ambani. JioCinema has boosted subscriptions by airing free cricket broadcasts and tapped into the demand for English-language content by nabbing HBO titles like Succession and NBC Universal shows like Game of Thrones.
WSJ reported that Disney’s India operations also need more scale and a relatively high operating expense ratio. The company is expected to lose 8 million subscribers this fiscal year, and overall revenue is projected to fall roughly 20% to less than $2 billion.
Despite those challenges, Disney isn’t giving up on the region. In a letter to investors in April, chief executive Bob Iger said he was still committed to the long-term growth of the company’s international businesses. That includes the Star India business, which comprises the Hotstar streaming service and a network of more than 70 channels.
The company acquired Star India as part of the $71.3 billion acquisition of 21st Century Fox’s entertainment assets in 2019. Combined with its channels in China, Disney’s portfolio of international channels and TV studios generates more than $10 billion in annual revenues.
A sale or partnership could free up cash for the company to spend on more significant initiatives, such as acquiring more intellectual property for its streaming platform and expanding into other markets like Italy. But any deal would likely take time, especially given the complexity of the Indian media market and its regulatory environment.
Historically, companies have used a variety of strategies to enter foreign markets. Some have built parks from scratch. Others have bought existing ones and tweaked them to suit local tastes better. For example, Disney’s Hong Kong park was designed with the guidance of government officials to reflect the region’s culture and sensibilities.
Some companies have even hired spies to research potential locations for future parks. In 2010, the Washington Post reported that a 34-year-old named Scott Roberts was sent to Northern Virginia to scout possible parks for Disney. He studied in the area and posed as a developer from Phoenix, Ariz. He used shell corporations, fake passports, and secret phone numbers to muddle his true identity as he met with brokers at restaurants like Morton’s in Tysons.
