The conglomerate has reportedly engaged with at least one bank to discuss potential growth strategies while sharing the cost burden. These options may include a sale of the business or forming a joint venture.
Walt Disney made significant investments to establish a strong presence in India when it acquired 21st Century Fox in 2019 for $71 billion, which included Fox’s TV assets in Asia and the Star pay-TV business in India. However, changes in the global streaming landscape and increased competition have impacted the value of these businesses. In India, the rise of mobile broadband delivery of video services has attracted new competitors, both local players and local-foreign ventures.
JioCinema, backed by Reliance Industries and Mukesh Ambani, poses a significant challenge as the biggest competitor. Despite being the market leader in streaming in India through its Disney+ Hotstar service, the loss of cricket telecast rights has weakened the product and could lead to a decline in subscribers.
The Indian streaming market is known for its low average revenue per user (ARPU) and price sensitivity, with Disney+ Hotstar India earning only $0.59 per month per subscriber. It is estimated that overall Star business revenue, including pay-TV and streaming, will decrease by around 20% to less than $2 billion for the fiscal year ending September 2023. EBIDTA are also expected to decline by approximately 50%.
Warner Bros. Discovery, meanwhile, has chosen to forge a content licensing deal with JioCinema instead of launching Max in India.