Disney’s Bob Iger bets big on Indian market, Hotstar

MUMBAI: Even as a large part of 21st Century Fox including the Star India business is changing hands one thing that will remain unchanged even under The Walt Disney Company management is the focus on the high-potential India business.

Speaking to analysts at the Morgan Stanley Technology, Media, and Telecom Conference, Disney chairman and CEO Bob Iger said that India represents one of the most high-growth media businesses.

The Disney chairman is particularly enamoured by the over the top (OTT) product Hotstar, which he feels provides exciting opportunities in the future.

Faced with competition from OTT platforms like Netflix and Amazon Prime Video, Disney has been looking at a direct to consumer (DTC) play for a long time. In fact, one of the key reason for acquiring 21CF assets is the DTC products like Hotstar, Sky, and Hulu that the company will get.

“We believe that there’s huge growth potential in certain markets on the media front. Certainly, India would be one example of that. They launched a product called Hotstar, which is an OTT product that we are quite interested in, on top of their channel and more traditional business,” Iger said.

Talking about the European market, Iger noted that BSkyB has also launched an OTT market called Sky Go which has the potential to travel to other markets.

“And of course, there are opportunities for us to use those platforms to distribute our product more effectively too. And again, to learn more about the direct-to-consumer business in general, which our company will, we think, will benefit greatly from,” he added.

Answering a question about the company’s lack of expertise on the DTC side, Iger noted that the 21CF acquisition comes not just with businesses but also with people who operate these businesses.

Iger gave the example of the team at Star India which has successfully expanded the business to newer heights. “If you look at what they’ve done, as a for instance, in India, which is quite impressive to us, they have expertise that our company will take full advantage of,” he noted.

In an earlier interaction with analysts, Iger had stated that Star India offers a massive scale to the company and will help in expanding its international footprint.

As part of the 21CF acquisition, Disney will get Star India and direct to home (DTH) business Tata Sky. The addition of Star India to its existing India business will pitchfork Disney into the largest media company.

21CF has set an ambitious EBITDA target of $500 million from the India business for the current financial year. The idea is to have $1 billion EBITDA by 2020.

21st Century Fox CEO James Murdoch had recently said that the company’s India business under Star is very much on course to achieve the EBITDA target of $500 million in FY18 while noting that there are ups and downs in every business.

While Murdoch didn’t elaborate on the ups and downs he asserted that the target will be met.

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