Disney Acquires Star India, Tata Sky Stake Via Fox Deal
Signage is displayed outside Twenty-First Century Fox Inc. headquarters in New York, U.S. (Photographer: Alexander F. Yuan/Bloomberg)

Disney Acquires Star India, Tata Sky Stake Via Fox Deal

The Walt Disney Company’s $52-billion acquisition of a chunk of Rupert Murdoch’s assets gives it access to Star India’s 720 million viewers a month in India and overseas and a 30 percent stake in cable TV services provider Tata Sky.

That includes 60 entertainment and sports channels of India’s largest broadcaster, including rights to telecast the Indian Premier League, the lucrative 20 over cricket event that clocked 1.25 billion impressions or viewership in its last edition.

Uday Shankar-led Star TV will have to double its efforts, increase investments, produce diverse and greater content to keep pace with Disney's “furious catch-up” strategy, Sarbvir Singh, a venture capital investor and merger and acquisition expert, told BloombergQuint in an interaction. Star India already has a good business in place and all they have to do is not ruin it, he said.

Watch the complete interview here:

Disney’s acquisition of some of the assets from 21st Century Fox will help it expand international reach through the addition of Sky, which serves nearly 23 million households in the U.K., Ireland, Germany, Austria and Italy; Fox Networks International, with more than 350 channels in 170 countries; and Star India, the company said in a statement announcing the deal. The company will also get content in Indian regional channels in eight different Indian languages.

Disney could also gain from Hotstar, Star TV's live-streaming app and website that’s facing competition from Netflix and Amazon Prime. “Disney made several mistakes by providing content to Netflix initially, and now they are in a catch-up mode,” Singh said.

Hotstar’s cumulative downloads crossed 200 million since its February 2015 launch. It also became the first Indian service to cross 100 million downloads on Google Play store in April this year.

Macquarie View

Brokerage Macquarie said Star’s key strengths in India is its senior management team and a medium-term churn needs to be monitored. Also, there was a need to see the impact on Hotstar and the minority stake in Tata Sky.

  • Star to provide Disney a significant Indian market opportunity.
  • Zee, Viacom 18 and Sony will benefit if there is a slip-up in India focus by Disney.
  • Star's key strengths in India is its senior management team.
  • Management churn in the near to medium term should be monitored.
  • Need to see the impact on Hotstar and a minority stake in Tata Sky.
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