Disney’s Indian business has continued to struggle since it acquired 20th Century Fox in 2019, where Star India was considered the “crown jewel” due to its reach across India; however, it hasn’t been able to make the most of this asset, and the value of its Indian business has continued to reduce over time by billions of dollars.

After months of speculation and reports, today, Disney has officially announced that it has signed a binding definitive agreement to form a joint venture with Reliance Industries Limited and Viacom 18 Media Private Limited that will combine the businesses of Viacom18 and Star India.

As part of the transaction, the media undertaking of Viacom18 will be merged into Star India Private Limited through a court-approved scheme of arrangement.

Disney’s Star India has over eighty linear channels and Disney+ Hotstar, which reaches more than 700 million viewers in nine different languages every month.  Across its studios in India, Star India generates more than 20,000 hours of original content every year.

This new joint venture will create the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment (e.g. Colors, StarPlus, StarGOLD) and sports (e.g. Star Sports and Sports18), including access to highly anticipated events across television and digital platforms through JioCinema and Hotstar.   With a combined joint venture, it will have over 750 million viewers across India and will also cater to the Indian diaspora across the world.

Disney will own a 36.84% stake in the new company, with Reliance owning 16.34% and Viacom owning 46.82%.  The joint venture has been valued at $8.5 billion dollars (₹70,352 crore), with Reliance agreeing to invest a further $1.4 billion (₹11,500 crore) for its growth strategy.

The plan for the new joint venture will see a major digital transformation of the media and entertainment industry in India and offer consumers high-quality and comprehensive content offerings anytime and anywhere. The combination of the media expertise, cutting-edge technology and diverse content libraries of Viacom18 and Star India will allow the JV to offer more appealing domestic and global entertainment content and sports live streaming services while delivering an innovative and convenient digital entertainment experience at affordable prices. With the addition of Disney’s acclaimed films and shows to Viacom18’s renowned productions and sports offerings, the JV will offer a compelling, accessible and novel digital-focused entertainment experience to people in India and the Indian diaspora globally.

It’s also been confirmed that Disney may also contribute certain additional media assets to the JV, subject to regulatory and third-party approvals.   As part of the agreement, the new joint venture will be granted exclusive rights to distribute Disney films and productions in India, with a license to more than 30,000 Disney content assets, providing a full suite of entertainment options for the Indian consumer.

Mrs. Nita M. Ambani will be the Chairperson of the new joint venture, and he said in a statement:

“This is a landmark agreement that heralds a new era in the Indian entertainment industry. We have always respected Disney as the best media group globally and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group.”

Mr. Uday Shankar, as Vice Chairperson, will be providing strategic guidance to the new company, and he also said in a statement:

“We are privileged to be enhancing our relationship with Reliance to now also include Disney, a global leader in media & entertainment. All of us are committed to delivering exceptional value to our audiences, advertisers, and partners. This joint venture is poised to shape the future of entertainment in India and accelerate the Hon’ble Prime Minister’s vision of making Digital India a global exemplar.”

And Disney CEO Bob Iger said:

“India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long-term value for the company. Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content.”

This new deal will likely have a major impact on the future of Disney+ Hotstar across the region, as it’s likely to be merged with JioCinema to help with cost cutting.  However, the deal will still have to go through regulatory, shareholder and other customary approvals and is expected to be completed in the last quarter of Calendar Year 2024 or the first quarter of Calendar Year 2025. 

So there isn’t going to be anything major happening any time soon, but this is likely to result in some other changes, with the use of the Hotstar and possibly Star branding, I wouldn’t be surprised if the Star hub on Disney+ is rebranded to Hulu internationally at some point in the future.  It’s also likely that this new deal will see changes to how Hotstar operates in some countries in the future and a likely rebranding of Disney+ Hotstar in some countries outside of India, but nothing is officially confirmed yet.   It also might explain why Hotstar content hasn’t made the leap across to Disney+ outside of India, since it seems Disney had decided it was going to sell that part of the company.

Over the past year, we’ve seen Disney drastically cutting back on how much money it is spending on original programming and looking to make larger cuts across the board.  The launch of Disney+ Hotstar resulted in a huge boost of subscribers, however once Disney decided not to bid for the expensive Indian Cricket Premiere League rights, which would have cost billions of dollars, Disney+ Hotstar lost over 20 million subscribers.

Most recently, Disney also got hit with a loss of over $1.4 billion dollars when Zee informed Disney that it would not be paying for the linear cricket rights, resulting in the value of Star India dropping even more.

The big problem with Disney+ Hotstar, was that each subscriber only brought in one-tenth of the revenue that a core Disney+ subscriber was bringing in per month.  So, while Disney+ had a huge amount of subscribers globally, the majority of them weren’t making much money for the company.   As part of this new joint venture, Disney will get paid for its content and still be able to reach a huge population of Indian consumers, with less risk. 

This deal is going to take some time to complete, so nothing is likely to change any time soon, but eventually, it’s likely Disney+ will simply become a hub within JioCinema in India rather than its own subscription service.  And I wouldn’t be surprised if Bob Iger never wants to go near live cricket coverage ever again.

What do you think of Disney making this new agreement?  Let us know on social media!

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Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

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