The Walt Disney Company’s journey in India spanning over 30 years has been fraught with challenges, primarily due to significant investments that failed to generate commensurate returns.
The initial decade saw Disney in a joint venture with the K.K. Modi Group to launch Buena Vista Television and three channels. However, the venture did not take off as planned, and operations were limited to advertising sales for other networks. Eventually, in 2004, Disney launched two kids’ channels—Toon Disney and Disney Channel—but the real money-spending was yet to come.
In 2006, Disney acquired Hungama TV and a minority stake (14.9%) in UTV Software Communications, owned by media entrepreneur Ronnie Screwvala. Over time, Disney increased its stake in UTV to 32.1% for approximately $230 million, including a 15% stake in UTV Global Broadcasting. In 2011, Disney went for a complete buyout of UTV Software for $454 million. However, the film production business of UTV, which Disney was drawn to, turned out to be an expensive gamble.
Lacking adequate knowledge of India’s film industry and making poorly structured deals, Disney faced losses even on blockbuster successes like Chennai Express and PK. The distribution rights were acquired at high costs, alongside substantial spending on marketing and promotions. The deal terms favored the film producers, resulting in Disney losing money on multiple occasions. Eventually, in 2016, Disney reportedly shut down its film production business in India.
Undeterred by these setbacks, Disney made a massive acquisition of Rupert Murdoch’s 21st Century Fox in 2018 for $71 billion, with Star India (as it was then called) valued at over $10 billion. Additionally, Disney acquired the television rights for the Indian Premier League (IPL) for over Rs 23,000 crore. However, JioCinema, a rival OTT platform, aired the IPL for free, dealing a severe blow to Disney’s television advertising revenue and impacting its subscriber base on Disney+ Hotstar.
With around 40-42 million subscribers on Disney+ Hotstar, the company faces numerous challenges ahead as it navigates India’s competitive market.
In conclusion, Disney’s struggles in India have been linked to expensive buyouts and less-than-ideal deal structures, particularly in the film production and broadcasting sectors. The company faces the uphill task of finding a sustainable and profitable foothold in the Indian market despite the setbacks it has encountered over the years.