Over the past few months, Disney has been exploring its options for its business in India, including talking to multiple companies about potentially selling off some assets as it looks to try to make its business more profitable.

Disney acquired Star India as part of its purchase of 20th Century Fox and rebranded the company to Disney Star, along with making many other changes. One of the biggest challenges Disney has had since relaunching Hotstar into Disney+ Hotstar has been profitability, since a subscriber in India is worth about 70 cents per month, compared to over $6 a month for a subscriber in North America or Europe. 

While the rebranding of Hotstar into Disney+ Hotstar gave the streaming service a huge boost in subscribers, which was what Wall Street was looking for at the time, Wall Street has since pushed for profitability.

It’s one reason why Disney decided to pull back from bidding on the Indian Premier League Cricket rights, which eventually was sold to Reliance’s Jiocinema for billions of dollars. This decision resulted in over 20 million people unsubscribing to Disney+ Hotstar, since all they had subscribed for was cricket coverage.

Disney CEO Bob Iger has spoken out about how Disney+ might not operate in every country moving forward since not every territory is equal. But wants to stay in India to “strengthen our hand, improve the bottom line.”

Recently, it was reported that Disney was coming close to making a deal with Reliance Industries and the Economic Times has reported that last week, Disney signed a non-binding term sheet that will see the two companies merge their Indian operations. The new contract will create one of India’s biggest entertainment companies, to compete with Zee Entertainment, Sony, Netflix and Amazon throughout the region.

This new deal will see Mukesh Ambani’s Reliance Industries owning a controlling stake of 51% of the new company through a combination of shares and cash, while Disney would hold a minority stake of 49% of the shares.

The deal was finalised during a meeting in London before Christmas between Candle Media Co-CEO Kevin Mayer, who was representing Disney and Ambani advisor Manoj Modi. The two have been working on a new deal for months.  Kevin Mayer is a former Disney executive who was behind the launch of Disney+, but left when Bob Chapek was announced to be Iger’s replacement, only to return in an advisory role earlier this summer.

Over the next 45-60 days, a valuation of the assets will be completed by independent valuers, along with many other experts, including tax and legal advisors, to finalise the deal. It’s expected that the merger deal will be completed in February, though Reliance wanted it to be sorted out by the end of January.

A capital injection of over a billion dollars is expected to be made on the formation of the new company.  Both Reliance and Disney will have a minimum of two members on the board of directors, with some additional members on the board, including someone from Viacom 18, who holds 15% of Reliance, plus some independent members.

Disney is also reorganising its businesses within India, with Digital Novi Digital Entertainment, the subsidiary that owns Disney+ Hotstar, currently in the process of merging with its parent company, Star, which holds a 78.07% stake in it.

One of the biggest problems Disney has been having with its Indian business, is miscalculating how Indian consumers are less likely to switch from free viewing to a paid premium subscription plan.

Disney hasn’t officially announced its plans for India, and it’s unclear what the future of Disney+ Hotstar is throughout India.  Hotstar and JioCinema will likely merge together to reduce costs.   It was previously reported that the deal includes a five-year exclusive license with the newly merged joint company, to get access to Disney+ Originals and its library content.  This would likely help the US side of the business with an income from the newly formed company. 

Hopefully, we will get some more information on the future of Disney’s ventures in India.  By joining forces with one of the biggest entertainment companies in India, it will be able to take advantage of a larger scale and have a partner focused on the Indian market.  While also providing people with access to Disney’s content for years to come. 

Disney has already begun separating its financial reports for Disney+ and Disney+ Hotstar.  And it’s also becoming increasingly more likely that Disney is going to be pulling back on its Star branding internationally, following the news that Star+ is closing in Latin America and rumours of the Star hub within Disney+ being rebranded to Hulu, now that Comcast is no longer involved in the US streaming service.

It does look like things will be changing internationally for Disney+ subscribers in 2024.  Hopefully, Disney announce its plans soon.

Do you think Disney partnering with Reliance is a good thing for India?  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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