Breaking Disney exploring options to sell or join venture Disney Star India Business

[dino29]

Is seriously STAR thinking to sell indian tv business? If we look on the entire year tv ratings 5 out of TOP 10 channels of Star Network are toping in the charts. Maa, Plus, Pravah, SS 1 Hindi & Vijay are rocking in charts. Then why star is thinking of sale out & wind up from Indian Market?

They will most likely not exit, Joint Venture with other companies across different business segments will be the new strategy so as to expand + compete with rivals alongside maintaining good financial growth

 

[dino29]

STAR's owner Disney wants sell due to falling revenues/profits. BARC rank will not get profits/revenues.

Hahaha! Infact Disney-Star is the most successful and biggest broadcast company in India....check out their revenues / profit margins and performance of channels across genres. Even in Sports TV Channels business they have done exceedingly well in earning huge revenue, just that due to India cricket properties being priced very high hence the overall profits may not be tjat high for this segment....also in OTT space too they gained hugely out of streaming India Cricket and even their Entertainment, Movies content on Disney+Hotstar has been hugely successfully , They were the first major OTT platform to adopt Freemium Business model in OTT space


With Jio entering the fray issue has arisen that if Disney buys India cricket rights at extremely high price then montization of the same will further be extremely difficult as 1stly bidding price would significantly increase, ad rates cannot go up beyond certain point on TV /OTT while in OTT segment providing such content absolutely free for even mobile subscribers does lead to substantial subscription revenue loss even though ad revenue sees an increase as both r needed to recover investment + gain profits.... Even as i have noticed over last 2 years fewer ads get shown during BCCI home matches which indicates that less brands r buying ad slots for the same or not willing to buy ad slots at high rates

So basically Disney has taken right step to have a joint venture with other companies or stake sale particularly for Sports TV Channels and Its OTT platform so as to build upon new strategy to compete with rivals. They will not exit both these segments while for their remaining TV business which is hugely successful they will likely enter partnership with some company for strengthening its foothold across various genres.

Basically restructuring will happen not exit.

Remember Disney+Hotstar cannot become like Netflix or Amazon Prime Video for which they would have to enter content acquisition agreement with prominent studios/companies thus not only difficult due to their already ongoing long term agreements but again revamping its OTT strategy comes up with various new challenges which again possesses finance burdens/risks so a JV with Amazon Prime Video or syndication agreement is right way forward

 

[Aksgr]

Hahaha! Infact Disney-Star is the most successful and biggest broadcast company in India....check out their revenues / profit margins and performance of channels across genres. Even in Sports TV Channels business they have done exceedingly well in earning huge revenue, just that due to India cricket properties being priced very high hence the overall profits may not be tjat high for this segment....also in OTT space too they gained hugely out of streaming India Cricket and even their Entertainment, Movies content on Disney+Hotstar has been hugely successfully , They were the first major OTT platform to adopt Freemium Business model in OTT space


With Jio entering the fray issue has arisen that if Disney buys India cricket rights at extremely high price then montization of the same will further be extremely difficult as 1stly bidding price would significantly increase, ad rates cannot go up beyond certain point on TV /OTT while in OTT segment providing such content absolutely free for even mobile subscribers does lead to substantial subscription revenue loss even though ad revenue sees an increase as both r needed to recover investment + gain profits.... Even as i have noticed over last 2 years fewer ads get shown during BCCI home matches which indicates that less brands r buying ad slots for the same or not willing to buy ad slots at high rates

So basically Disney has taken right step to have a joint venture with other companies or stake sale particularly for Sports TV Channels and Its OTT platform so as to build upon new strategy to compete with rivals. They will not exit both these segments while for their remaining TV business which is hugely successful they will likely enter partnership with some company for strengthening its foothold across various genres.

Basically restructuring will happen not exit.

Remember Disney+Hotstar cannot become like Netflix or Amazon Prime Video for which they would have to enter content acquisition agreement with prominent studios/companies thus not only difficult due to their already ongoing long term agreements but again revamping its OTT strategy comes up with various new challenges which again possesses finance burdens/risks so a JV with Amazon Prime Video or syndication agreement is right way forward

Bro, these profits are not profits for disney. As i already broke down the profit its around 70-100million $ per quater thats nothing for disney. And this will only decrease as competition becomes tight.
This year ICC might be most successful for them but it has cut Disneys revenue by half.

 

[Ashok Varma]

Hahaha! Infact Disney-Star is the most successful and biggest broadcast company in India....check out their revenues / profit margins and performance of channels across genres. Even in Sports TV Channels business they have done exceedingly well in earning huge revenue, just that due to India cricket properties being priced very high hence the overall profits may not be tjat high for this segment....also in OTT space too they gained hugely out of streaming India Cricket and even their Entertainment, Movies content on Disney+Hotstar has been hugely successfully , They were the first major OTT platform to adopt Freemium Business model in OTT space


With Jio entering the fray issue has arisen that if Disney buys India cricket rights at extremely high price then montization of the same will further be extremely difficult as 1stly bidding price would significantly increase, ad rates cannot go up beyond certain point on TV /OTT while in OTT segment providing such content absolutely free for even mobile subscribers does lead to substantial subscription revenue loss even though ad revenue sees an increase as both r needed to recover investment + gain profits.... Even as i have noticed over last 2 years fewer ads get shown during BCCI home matches which indicates that less brands r buying ad slots for the same or not willing to buy ad slots at high rates

So basically Disney has taken right step to have a joint venture with other companies or stake sale particularly for Sports TV Channels and Its OTT platform so as to build upon new strategy to compete with rivals. They will not exit both these segments while for their remaining TV business which is hugely successful they will likely enter partnership with some company for strengthening its foothold across various genres.

Basically restructuring will happen not exit.

Remember Disney+Hotstar cannot become like Netflix or Amazon Prime Video for which they would have to enter content acquisition agreement with prominent studios/companies thus not only difficult due to their already ongoing long term agreements but again revamping its OTT strategy comes up with various new challenges which again possesses finance burdens/risks so a JV with Amazon Prime Video or syndication agreement is right way forward

Disney wants more ARPU, so they are not satisfy for Rs.19/- MRP because high production costs to programs and high priced new movies acquisition for its linear TV as ad revenues declined year by year due to digital shift. So they are in a complete sale process, other wise JV with strong financial company/Private Equity firm.

 

[peter9]

Disney wants more ARPU, so they are not satisfy for Rs.19/- MRP because high production costs to programs and high priced new movies acquisition for its linear TV as ad revenues declined year by year due to digital shift. So they are in a complete sale process, other wise JV with strong financial company/Private Equity firm.

Yes you are correct. Disney paid $71.3 billion to acquire Fox. Compare to the investment the India business is not at all profitable to them. Or else they never came with selling or joining JV option. Also Disney+ subscription is $7.99(Rs.665 approx) in US per month compare to Rs.299.00 in India. The profit is less than half what they are getting in US. In terms of revenue, Disney is not earning high profit.

 

[peter9]

Hahaha! Infact Disney-Star is the most successful and biggest broadcast company in India....check out their revenues / profit margins and performance of channels across genres. Even in Sports TV Channels business they have done exceedingly well in earning huge revenue, just that due to India cricket properties being priced very high hence the overall profits may not be tjat high for this segment....also in OTT space too they gained hugely out of streaming India Cricket and even their Entertainment, Movies content on Disney+Hotstar has been hugely successfully , They were the first major OTT platform to adopt Freemium Business model in OTT space


With Jio entering the fray issue has arisen that if Disney buys India cricket rights at extremely high price then montization of the same will further be extremely difficult as 1stly bidding price would significantly increase, ad rates cannot go up beyond certain point on TV /OTT while in OTT segment providing such content absolutely free for even mobile subscribers does lead to substantial subscription revenue loss even though ad revenue sees an increase as both r needed to recover investment + gain profits.... Even as i have noticed over last 2 years fewer ads get shown during BCCI home matches which indicates that less brands r buying ad slots for the same or not willing to buy ad slots at high rates

So basically Disney has taken right step to have a joint venture with other companies or stake sale particularly for Sports TV Channels and Its OTT platform so as to build upon new strategy to compete with rivals. They will not exit both these segments while for their remaining TV business which is hugely successful they will likely enter partnership with some company for strengthening its foothold across various genres.

Basically restructuring will happen not exit.

Remember Disney+Hotstar cannot become like Netflix or Amazon Prime Video for which they would have to enter content acquisition agreement with prominent studios/companies thus not only difficult due to their already ongoing long term agreements but again revamping its OTT strategy comes up with various new challenges which again possesses finance burdens/risks so a JV with Amazon Prime Video or syndication agreement is right way forward

I am not at all agree with the above statement. If Disney Star is the most successful company then why should they are interested in a joint venture to share their so called profit. I am quite confident that the profit they are showing might be differ from the actual. No doubt Star India is good on all aspects except profit. Disney not at all interested in mere profit after paying billions. I don't care if anyone is not agree with opinion.

 

[dino29]

Bro, these profits are not profits for disney. As i already broke down the profit its around 70-100million $ per quater thats nothing for disney. And this will only decrease as competition becomes tight.
This year ICC might be most successful for them but it has cut Disneys revenue by half.

Same was true when Star India was owned by Mudrochs....it does not matter what % is the revenue earned from India business compared to overall revenue earned by company worldover.

India is a price sensitive market so obviously any company won't earn as much revenue as subscription fee cannot be raised beyond a certain , ad revenue too has limitations + varies as per content and above all content acquisition/production costs r high so even if due to high volume (audience base) the revenue generated is extremely good then too profit margins remain not so high specially if company invests a lot in high priced properties.

 

[dino29]

I am not at all agree with the above statement. If Disney Star is the most successful company then why should they are interested in a joint venture to share their so called profit. I am quite confident that the profit they are showing might be differ from the actual. No doubt Star India is good on all aspects except profit. Disney not at all interested in mere profit after paying billions. I don't care if anyone is not agree with opinion.

Buddy Please read my post again, it contains answer to ur question

 

[dino29]

Yes you are correct. Disney paid $71.3 billion to acquire Fox. Compare to the investment the India business is not at all profitable to them. Or else they never came with selling or joining JV option. Also Disney+ subscription is $7.99(Rs.665 approx) in US per month compare to Rs.299.00 in India. The profit is less than half what they are getting in US. In terms of revenue, Disney is not earning high profit.

Buddy Disney is restructuring its business worldover and i have already explained the same earlier on so it is not that only in India they r making such changes..... Infact India is the only select few markets where TV and OTT both have huge growth prospect and has a huge appeal among diverse audience base, this is why Disney bought India business of Fox even at such high cost.

Joint Venture option is being considered to work on a strategy where in TV + Digital Landscape growth can be accelerated while adapting to fast evolving broadcast industry ecosystem and improve capability to compete with rivals in most efficient manner.

Also remember in India volume of subscribers plays key role rather than high profit margin per subscriber base barring super niche content which is viewed by hardly 1 or 2% of audience which is ready to pay high subscription fee for it otherwise even for regular niche content Freemium model is best suited (not so high subscription fee + more ad revenue)

 

[Ashok Varma]

Same was true when Star India was owned by Mudrochs....it does not matter what % is the revenue earned from India business compared to overall revenue earned by company worldover.

India is a price sensitive market so obviously any company won't earn as much revenue as subscription fee cannot be raised beyond a certain , ad revenue too has limitations + varies as per content and above all content acquisition/production costs r high so even if due to high volume (audience base) the revenue generated is extremely good then too profit margins remain not so high specially if company invests a lot in high priced properties.

If thin margins are the concern in Linear TV, then Sony might exit India after Disney.