Hotstar parent Novi Digital receives Rs 516 cr fund infusion from Star US

MUMBAI: Novi Digital Entertainment, the holding company of over the top (OTT) platform, has received a fund infusion of Rs 516 crore from parent company Star US Holdings.

21st Century Fox CEO James Murdoch had stated that the company had made a big investment in Hotstar in FY18. On an earlier occasion, Murdoch had stated that the company will invest $50 million in the Hotstar platform in FY18.

As per financial documents sourced from business intelligence platform paper.vc, the fair value of Novi Digital is $265 million based on valuation exercise done by Duff and Phelps for the company.

As of July, Hotstar’s paid subscriber base stands at 0.7 million. Novi Digital’s revenue for FY18 was Rs 571 crore as against Rs 321 crore in the previous fiscal.

Novi’s loss in FY18 reduced to Rs 389 crore compared to Rs 489 crore in the previous fiscal.

The company’s revenue for the quarter ending June was Rs 569 crore mainly due to ad and subscription revenue from the Indian Premier League (IPL). Novi reported operating loss of Rs 37.9 crore during the quarter.

“We understand from the management that the significant increase is mainly on account of advertisement and subscription revenue from exclusive sports content of the IPL in the said period,” said the valuation report for Hotstar, which was compiled by corporate finance advisor Duff & Phelps.

Novi Digital is a subsidiary of Star India, which is owned by American media conglomerate 21st Century Fox.

Hotstar, streams local and international television shows, movies, sports, news and original series in up to nine languages and incorporates gaming and social features.

In fiscal 2018, Hotstar achieved a high of approximately 148 million active users and ended the fiscal year with approximately 111 million active users. In October 2017, Hotstar launched in the United States and Canada, offering live sports and Indian-language television series and movies.

Hotstar’s domestic premium subscription service in India offers live sports and Indian-language television series and movies, as well as English-language television series and movies, including HBO original programming exclusive to Hotstar in India, the Fox Library and content from Disney and Showtime Networks.

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