- Disney is in advanced discussions to potentially sell its Indian business for an estimated $10 billion to rival Reliance Industries.
- Despite holding a 29% market share, Disney’s growth in the competitive Indian OTT market has stalled.
- Disney plans to sell to its main competitor, Mukesh Ambani’s Jio, acknowledging the challenges in the Indian market.
- Valuation negotiations will likely be the focal point of the deal, with Disney valuing its Indian business at $10 billion and Jio aiming for $7-8 billion.
Disney might be selling its Indian business for around $10 billion. According to Reuters, they’re close to a deal with rival Reliance Industries. The sources, who were not named, say that Reliance thinks the parts of Disney India it’s buying are worth $7-8 billion.
In the OTT market, Average Revenues Per User reigns supreme. Disney’s ARPU woes in India are evident. Comparing Disney+ and Hotstar, it’s crystal clear that while Disney+ subscribers in the West are pulling in a hearty $4.44 per month, Hotstar subscribers in India are delivering a modest $0.59.
The contrast is stark: “out of India” subscribers are a striking 7.5 times more valuable than their “in India” counterparts.
Cricket Loss and Hotstar’s Freefall
In cricket-crazy India, Hotstar’s loss of streaming rights to the nation’s premier cricket league triggered a massive subscriber exodus, with over 20 million paying customers jumping ship since the year began. This precipitated a staggering $400 million nosedive in revenue and a 50% slash in profits.
The Ferocious Landscape of Indian OTT Market
The Indian online streaming domain is a battleground like no other. Disney may hold a 29% lion’s share in users and revenue, but the tide changed drastically once Mukesh Ambani entered the fray. With an aggressive push from industry giants, Disney’s growth has plateaued. Employee poaching, a burdensome $71 billion cost stemming from Disney’s Fox acquisition, and a series of strategic missteps (think UTV acquisition) have only added to Disney’s troubles.
Disney’s Strategic Retreat: Selling to Its Arch-Rival
Disney’s battle in the Indian market is proving increasingly futile, and the company is ready to cut its losses. The buyer? None other than Mukesh Ambani’s Jio, Disney’s most formidable competitor.
With Disney evaluating its Indian business at a lofty $10 billion, Mukesh Ambani’s Jio will likely push for a more conservative price range, aiming for a deal in the $7-8 billion bracket.
The exit of Disney from India signifies more than just a business move; it underscores the fierce competition and challenges rampant in the Indian OTT market. Stay tuned as the legal and business experts hash out the deal.
