How JIO’s Masterplan Beat Disney & became the King of Indian OTT? | Business Case Study

Think School・2 minutes read

Mukesh Ambani's Reliance Industries merged with Disney Plus Hotstar, giving him control over the majority share of the combined entity and making Reliance a key player in the Indian media market, challenging Disney's dominance with strategic moves and acquisitions.

Insights

  • Mukesh Ambani's strategic merger with Disney Plus Hotstar positioned him as a major player in India's media landscape, controlling 63.16% of the merged entity and dethroning Disney from its leadership position in the country's OTT market.
  • Reliance Industries' aggressive expansion and strategic acquisitions, including the lucrative IPL digital streaming rights and exclusive content deals, have significantly impacted Disney's market dominance in India, leading to substantial losses for the latter and establishing Reliance as a formidable force in the industry through leveraging its diverse business portfolio.

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  • What caused Disney's decline in India?

    Heavy losses despite high viewership numbers.

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Summary

00:00

Reliance-Disney Merger Dominates India's Media Market

  • On February 20, 2024, Disney Plus Hotstar merged with Mukesh Ambani's Reliance Industries, creating a dominant force in India's TV and streaming market.
  • This merger gave Mukesh Ambani control over 63.16% of the merged entity, making him a significant player in the Indian media space.
  • The merged entity now owns 35% of India's OTT market, 120 television channels, and 30,000 content assets from Disney, reaching 750 million viewers.
  • Reliance's strategic move dethroned Disney, which had been the leader in India's OTT space in 2021 with a viewership of 51 million.
  • Mukesh Ambani's business strategy involved a joint venture with Disney, similar to a hypothetical merger scenario explained with two media companies, Think Media and WTF Media.
  • Ambani's investment of $1.4 billion increased the joint venture's value to $8.5 billion, with Reliance holding 63.16% of the entity.
  • Disney's valuation dropped from $5.4 billion in 2021 to $3.9 billion in 2024, leading to questions about its financial performance and strategic decisions.
  • Disney's acquisition of Star India in 2017 gave them access to a vast audience of 700 million people through 77 TV channels, including Star Plus, Star Sports, and Hotstar.
  • Hotstar's unique model of combining advertising video on demand (AVOD) and subscription video on demand (SVOD) helped them reach a large audience and generate revenue effectively.
  • Disney's heavy losses, despite high viewership numbers, were a significant factor in their decline, allowing newcomers like Jio to challenge their dominance in the Indian media space.

15:22

Reliance's Disruption of Disney in India

  • Disney Plus Hotstar faced a setback when their 5-year IPL license expired, leading to Mukesh Ambani's Wcom 18 outbidding Disney with a $2.89 billion deal for digital streaming rights from 2023 to 2027.
  • Jio made a groundbreaking move by offering free streaming of IPL, a highly valuable sports property with a viewership of nearly 700 million, through their platform GeoCinema, significantly impacting Disney's subscriber base.
  • Mukesh Ambani further disrupted Disney's OTT business by acquiring exclusive rights to stream HBO content in India, followed by a multi-year deal with NBC Universal for popular shows like "The Office" and "Friends."
  • Disney faced significant losses in India, with Star Sports reporting an operating loss of $444 million in the first 9 months of 2023, leading to a drop in Disney's stock price to its lowest level in 9 years.
  • Reliance's strategic moves in the media space, including mergers with Balaji Telefilms, Saavn, and Wcom 18, positioned them as a dominant force in the industry, surpassing Disney India's valuation.
  • Reliance leveraged its vast empire of over 250 companies, including brands like Jio, AIO, and BookMyShow, to create a monopoly in advertising, control IPL's digital and TV rights, and offer bundled services to attract customers from competitors like Airtel, potentially generating significant revenue.
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