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Lachlan Murdoch bullish on Hotstar’s growth due to deal with RJio

MUMBAI: 21st Century Fox executive chairman Lachlan Murdoch is bullish about the growth of Star India’s video-on-demand (VoD) service Hotstar, particularly with the launch of Reliance Jio’s 4G services.

In fact, this is the first time that Star has offered its content to another platform which offers OTT service. Star’s channels, for example, are not available on Zee-owned dittotv.

Lachlan_MurdochNot only is Star’s linear channels part of Jio TV app, but its VoD service Hotstar is also bundled with the app. Jio’s premium services, which are priced Rs 199 per month, are available to Jio customers for free. The premium service includes English Premier League and HBO’s original content.

According to Lachlan, who is Rupert Murdoch’s elder son, the consumption on Hotstar is expected to shoot up due to Jio, which is offering 4G service at affordable price bundled with premium content.

Murdoch said that Hotstar with 70 million downloads is the fastest downloaded app in the Indian history. The VoD service saw a humongous growth in consumption between July and August, with streamed content increasing to 2.5 billion minutes in August from 750 minutes in July.

“Between July and August, the minutes streamed at Hotstar went from 750 minutes streamed to 2.5 billion minutes streamed on Hotstar, and this will grow actually significantly with the launch of Reliance Jio mobile 4G service, for which Hotstar is the exclusive programme provider,” Murdoch told analysts recently.

“Reliance Jio, which has been the biggest launch of a consumer product in many years, will offer Hotstar including the premium service for free. Every single consumer will have access to Hotstar premium, which is a $3 service,” he noted.

Drawing comparison between Netflix India and Hotstar, Murdoch said that the streaming service is just 6% the size of Hotstar.

“If you compare with a Netflix in India, Netflix is about 6% the size of Hotstar, so we’re very bullish on the Indian market and the prospects of Star,” he said.

He went on to praise Star India, which is targeting $1 billion in EBITDA by 2020. Murdoch, however, put in a caveat by stating that Star’s aggressive target also hinges on the overall performance of the Indian economy.

“Star is an incredible asset and I think it’s important for us because we will see a lot of growth from Star over the next couple of years. We’ve talked about that openly. We should see $1 billion EBITDA in 2020 and so we are on track for that growth. The only caveat you put to that is obviously the Indian economy. You want the Indian economy to stay healthy and stay strong, but we think sitting here today that that’ll happen,” he stated.

Star produces 17,000 hours of local content per year in eight different languages. It is also a leading player in sports with a bunch of local and international sports rights.

Earlier, 21st Century Fox CEO James Murdoch had said that Star India, including the sports business, had delivered an EBITDA of over $200 million during FY16. 21st Century Fox, Star India’s parent company, follows a financial calendar of 1 July to 30 June.

The company recently revealed that it would invest $5 billion in India over the next three years.