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News Honour > Blog > Business > Disney-Star losing the IPL/BCCI rights a step to profitability, say experts – Fortune India
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Disney-Star losing the IPL/BCCI rights a step to profitability, say experts – Fortune India

Editor
Last updated: 2023/09/30 at 8:13 PM
By Editor 7 Min Read
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After losing the digital rights for the Indian Premier League last year, Disney Star India made yet another unsuccessful bid to bag the BCCI media rights. Reliance-owned Viacom 18 yet again outwit them with their winning bid of ₹5,966 crore for both TV and digital rights. The loss of IPL’s digital rights resulted in a 25%-30% erosion of the subscriber base of Disney Hotstar. It is expected to move further southwards with the BCCI rights also going out of their kitty.
However, former Star India employees and a section of the media industry see a silver lining. “I don’t agree losing cricket media rights is a negative. I believe it’s a good way of enhancing profitability,” says a former Star India employee, who was part of the core team when the company was led by Uday Shankar. He says that the company was highly profitable before it invested in sports.
Star India had paid over ₹16,000 crore for IPL rights in 2017 but was nowhere close to profitability. “Disney-Hotstar may have lost out on subscribers and advertising revenue thereof, but it hardly earned 60 cents per viewer. I don’t believe that the fundamentals of Star are so weak that it would be on its knees just because it has lost out on cricket. If they reallocate their content portfolio through a multi-platform strategy, they will be much better off rather than burning cash on sports,” adds yet another former Star-Disney employee.
Karan Taurani, senior vice-president and research analyst at Elara Capital, says after incurring huge losses in the past five years in sports Disney-Star no longer has an appetite to burn capital on sports. “The market environment is not conducive. Several categories of advertisers such as gaming, edtech have been wiped off. Even other companies are not spending as much as they used to earlier. Monetisation will be a challenge. From that perspective it makes sense for them to be a little more defensive when it comes to the purchase of these media rights,” explains Taurani.
Ever since it took over Star India Disney has been uncomfortable about the latter’s sports investments. In fact, Taurani believes that the company’s acquisition of Star happened at a time when competition intensity was at an all-time high. “If you look at OTTs, platforms were getting launched every 6-7 months. OTT is a highly competitive market, and India still hasn’t made a success of monetisi g content on digital. Even the time spent on TV coming down. Therefore, it makes sense for them not to burn money on large scale sporting properties. It’s a high-risk game. When the environment is good, these big properties will see high ad dollars, but when the environment is bad, they will see a sharp cut as well.”
In fact, Disney CEO, Bob Iger, according to a report by Wall Street Journal, is actually looking for a strategic partner for its India business. The report didn’t rule out a complete sale either. To get a strategic partner on board or even a buyer, it’s important to be profitable, points out the former Star India employee. “The company should now focus on its core profitable channels (essentially Star Plus and regional channels) and focus on IP creation which is its forte.”
As far as digital is concerned, Disney-Star, believe industry experts, should go slower on creating new original content for the Indian market. “They already have a rich portfolio created over the years which they can reallocate on OTT. Instead of spending crores on original content, they could focus more on their successful global content,” the former Star employee further advises.
Disney-Star is not the only one which is facing challenges in its digital business, points out Taurani. “On the original front everyone is struggling. There won’t be more than 7-10 shows which would have seen massive success in the last few years. Disney’s core focus is its global studios and global content. They want an IP focus, which makes absolute sense.”
Disney’s Iger has hinted at a potential sale of its linear assets. However, in India, it can’t afford to get rid of them as they play an important role in revenue generation. Digital is still in an investment stage in India and a convincing business model is yet to evolve.
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Larsen & Toubro will design and build an underground road tunnel project between Orange Gate, Eastern Freeway and Marine Drive Coastal Road in Mumbai.
Total 72,368 MLD sewage was generated in urban areas in India in FY21. But, installed sewage treatment capacity is 31,841 MLD and operational capacity is 26,869 MLD
Pocket Aces is the parent company of digital content channels such as FilterCopy, Nutshell, Gobble and Dice Media, amongst others.
Kamath says that the company’s focus has always been on building on resilient business, thus meaning never having to rely on external capital.
Larsen & Toubro will design and build an underground road tunnel project between Orange Gate, Eastern Freeway and Marine Drive Coastal Road in Mumbai.
Total 72,368 MLD sewage was generated in urban areas in India in FY21. But, installed sewage treatment capacity is 31,841 MLD and operational capacity is 26,869 MLD
Pocket Aces is the parent company of digital content channels such as FilterCopy, Nutshell, Gobble and Dice Media, amongst others.
Kamath says that the company’s focus has always been on building on resilient business, thus meaning never having to rely on external capital.

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Editor September 30, 2023 September 30, 2023
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