Disney is collaborating with Asia’s richest man, Mukesh Ambani, to create a new media giant in India that says it will reach a domestic audience of more than 750 million people.
Billionaire Mukesh Ambani’s Reliance Industries and Disney have combined their digital streaming platforms and 100 TV channels in India in a joint venture that is worth about $8.5 billion, the companies said in a statement Wednesday.
There has been talk of a potential deal for some time, as Disney has struggled with how to take advantage of the market of a nation of more than 1 billion people where English is widely spoken. Disney also has a multitude of problems in its domestic market of America.
Disney made a major push into the country in 2019 when it acquired the majority of 21st Century Fox, which included its large Star India network.
The transaction still remains subject to regulatory, shareholder and customary approvals. The deal is expected to be completed in either the final quarter of 2024 or the first quarter of 2025.
Reliance will own just over 63% stake in the merged entity, with 16.3% directly and 46.8% through Viacom18 in which it has a controlling stake, while Disney will hold the rest of the rights.
Ambani’s wife Nita M. Ambani will be the head chair of the joint venture, which combines Disney’s catalog of shows and TV with Viacom18’s productions and sports programs, the companies said, adding that the venture would also cater to the Indian diaspora across the world.
In a separate filing, Disney said it expects to record non cash pre tax impairment charges that range between $1.8 billion and $2.4 billion in the current quarter. Roughly half of those values reflect a write-down of the net assets that make up Star India.
Disney faced significant setbacks in 2022 after it lost the digital rights to stream the hugely popular Indian Premier League cricket matches to Ambani’s conglomerate, Reliance Industries.
Disney’s streaming app in India, Hotstar, has lost millions of subscribers since then. Disney then suffered another blow last March when it stopped streaming content from HBO.
In its latest financial year, which ended in September, Disney earned revenue of only 66 cents on average per Hotstar subscriber. This is down from 88 cents in 2022 and can be compared with $5.93 for a non-US subscriber to Disney+, its main streaming service, according to its annual report.
The number of Hotstar subscriber numbers plunged 39% to 37.6 million over the course of the latest financial year.
