We are bullish about India: Disney Chief Bob Chapek
According to Chapek, the acquisition of IPL TV rights and ICC digital rights by Walt Disney’s India unit is a great example of seeking value through different strategies
Walt Disney Company Chief Bob Chapek has said that the media conglomerate is bullish about the Indian market from the long-term streaming strategy perspective. He was speaking at the Goldman Sachs Communacopia + Technology Conference 2022 recently.
Chapek termed the acquisition of Indian Premier League (IPL) TV rights and International Cricket Council (ICC) digital rights by its India unit as a great example of seeking value through different strategies. He also said that the company weighs the value of a sports property on the basis of the value that it brings to the shareholders.
Disney+ Hotstar, the streaming platform owned by Disney Star, had hit the 58.4 million paid subscriber base in July and is eyeing 80 million paid subscribers by the end of fiscal 2024.
Chapek noted that very few foreign media companies have succeeded in India. Disney, he said, has tasted success in the linear as well as streaming business. "A lot of companies have tried and failed in India and we have actually had a lot of success both on our linear business, and in terms of generating subs for Hotstar. So, we certainly don’t take that lightly. It’s a big growth market as you know. A lot of companies have had challenges trying to be successful there."
The Disney CEO is satisfied with the IPL and ICC rights acquisition done by the India unit. He also contended that Disney Star had to give up IPL digital rights since the value was too unrealistic. He further stated that the acquisition of ICC media rights and parceling off the TV rights to Zee was a strategic decision.
"I am really proud of our team and what they orchestrated on the cricket rights because our hope is they come for cricket, but they stay for Disney. And I think what you are going to find is we did a surgical plan to try to get the linear rights for IPL knowing that the market got a little too frothy for us on the digital rights, but then we came back and got the ICC digital rights, which were not as frothy and a much better value for our shareholders and then kind of spun off the excess linear rights because we already got that from the IPL. So, I think it’s a great example of us trying to seek value in different ways not to say on, off or yes or no," Chapek explained.
He asserted that Disney was bullish about the growth prospects of the streaming business in India. "But what we do, the extent that we go to try to orchestrate a scenario that’s going to be accretive for our shareholders and enable us to still play the growth game in that particular market. So we are still bullish about India."
The Walt Disney Company Senior EVP and Chief Financial Officer Christine McCarthy had earlier stated that IPL TV rights and ICC digital rights will help Disney Star to get the right volume and cadence of content for its TV (Star Sports) and digital (Disney+ Hotstar) platforms.
Speaking at the 2022 Bank of America Securities Media, Communications & Entertainment Conference, McCarthy also said that the company has consciously decided to stay away from sports rights that are not value-accretive. McCarthy noted that the company remains focussed on achieving profitability for Disney+, including the Disney+ Hotstar business in 2024.
"When we look at sports rights, we look at them not just financially but also strategically. There are lots of different sports rights out there. And there are lots of platforms. You can go just for linear. You can go for digital. You can do some flexibility in negotiations that you're having with the sports rights’ owners. But we look at these sports rights’ deals. And we've made a commitment that we will not do deals that are not value-accretive. So, we have been disciplined," McCarthy said.
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