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Hotstar a key piece in India growth story: 21st Century Fox CFO John Nallen
MUMBAI: Star India’s over-the-top (OTT) video-on-demand (VoD) platform Hotstar is a key piece in the India growth story of 21st Century Fox, the company’s CFO John Nallen has said.
Hotstar, which has become the most downloaded app in India, will also appeal to the Indian diaspora in key markets like the US and UK, where Fox has a big stake.
“On a longer term, when I look at the growth of India, Hotstar is a key piece in that and it also has the opportunity to appeal to the India diaspora where we sell our product currently in the UK and on Dish in the US,” Nallen said at an investor conference in the US recently.
Nallen also noted that Hotstar had 135 million downloads and 8 billion minutes of content consumption in January, which makes it the biggest video platform in India. Hotstar, he said, has become the second TV in a market where single TV is the norm.
“As of yesterday, Hotstar had 135 million downloads—the biggest app download in India’s history. By just version of usage, in January it had 8 billion minutes viewed on it—10 times what it had six months earlier,” he said.
He added further, “So, just to talk about the momentum that this product has, it has become the second TV in the household. In an Indian household that only has one TV, this portable television that people have has allowed there to be a second TV.”
The consumption on Hotstar and Star’s channels are driven by 17,000 hours of local content that the Indian subsidiary creates every year.
“We produce 17,000 hours per year of our local Indian product, and that’s what drives the market, that’s what drives Star’s ratings, that’s what drives the minutes on Hotstar,” Nallen said.
To bolster his point, Nallen said that Reliance Jio, the disruptive 4G network launched by India’s richest man Mukesh Ambani, has partnered Hotstar for its OTT app Jio TV. Jio TV is the only OTT platform that has been successful in getting content from Star.
Asked about the impact of Netflix and Amazon Prime Video, Nallen said that the former has been ineffective due to lack of local content while the latter has somewhat succeeded in disrupting the market by investing heavily on creating and acquiring local content.
“Netflix only has 6% of viewing of Hotstar. They haven’t really made a dent. Amazon is investing very significantly in local products, which have been the hallmark of Star’s success in India,” he stated.
Nallen also said that the cost of content will rise due to Amazon’s aggressive OTT play.
On the company’s India story, Nallen said that India is the most promising market for the company due to its growth potential on both advertising and affiliate side. He referred to the growth in TV households in the last two years to bring home his point. Similarly, advertising expenditure has seen a significant growth in the country.
Nallen, however, added that there would be speed bumps in the company’s growth trajectory. Demonetisation, wherein 86% of the currency became illegal tender, was a case in point.
“Our ad revenue took a hit of $30 million dollars during the October–December quarter due to demonetisation,” he stated.
Speaking in early March, he also said that the recovery was yet to happen in the right earnest.