15 December,2017 11:55 AM IST | | Reuters
Walt Disney Co's deal with Twenty-First Century Fox Inc gives the world's best-known entertainment company new advantages in India, such as cricket rights and local-language TV shows for the fast-growing media market
Walt Disney Co's deal with Twenty-First Century Fox Inc gives the world's best-known entertainment company new advantages in India, such as cricket rights and local-language TV shows for the fast-growing media market. Through the USD52.4 billion deal, announced on Thursday morning, Disney would be able to distribute its programming on Star India, operator of 69 TV channels in eight languages, as well as the popular Hotstar streaming service. Disney also would gain global rights to professional cricket. "It is an amazing opportunity to get into the best developing market in the world," MoffettNathanson analyst Michael Nathanson said, "but it is highly competitive."
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Netflix Inc has been offering its streaming service in India for nearly two years, and Amazon.com Inc's Prime Video has been courting customers there for one year. Global expansion is important to Disney because its largest U.S. network, ESPN, has been losing subscribers as audiences migrate from traditional television to digital viewing. India represents the second-largest subscription TV market in Asia, with 154 million households in 2016, according to consultancy PricewaterhouseCoopers, which projected that number will grow to 167 million in 2021. Mobile video traffic, meanwhile, is booming. KPMG expects it will grow at a compound annual growth rate of 68 percent between 2016 and 2021. Star India is also flush with cash. Fox projects it will earn USD500 million before interest, taxes, depreciation, and amortization in fiscal 2018, rising to USD1 billion in 2020.
"Star India alone is by far the most successful TV network in the fastest-growing country," Macquarie Research analyst Tim Nollen said. Star's TV business could bring in new advertising revenue at a time when U.S. ad spending is growing at a slower pace. In the first fiscal quarter, Fox saw international ad revenue jump 10 percent, fueled by double-digit increases in growth through Star India, while in the United States the company saw 3 percent growth in ad revenue.
