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What Disney-Fox deal may mean for Indian market

There is a lot of speculation in the market about the possible strength and muscle this deal will lend to the traditional media company Disney to fight against new-age giants like Netflix and Amazon. BestMediaInfo.com finds out what it holds for the Indian market

The likely deal for the acquisition of the partial assets of 21st Century Fox by The Walt Disney Company is approaching closure and, if media reports are to be believed, it will be announced by next week.

The deal will involve acquisition of Fox’s NatGeo, Star, regional sports networks, movie studios and stakes in Sky and Hulu, among other properties by Disney. If the deal is finalised, it will include international assets such as Star Cable and Media Company in India.

This deal is also expected to give Disney control over one of the fastest growing entities – Star India – which lies within Fox International, along with over 300 international channels. This might not be a big one from valuation point of view, but it is huge from the point of growth potential, especially “in an area where Disney is lagging its traditional media rivals".

But industry leaders believe this deal may not be very beneficial for Star in India and could end up being a drag since Disney's attitude and culture has always been very conservative. Experts say the two players are coming together so that they can survive the likes of Netflix and the Indian market in the current scheme of things doesn't mean much.

A top executive with a leading broadcaster told BestMediaInfo.com, "In my view is that Disney is the junior partner in India, Star India will rule in this market. Also, Disney and Fox have very different management styles. Disney is very slow and conservative, while Star India is quite aggressive. This might create a lot of cultural issues, to my mind. Kids is one genre where Star India did not have a presence and that will be its strong point. But everywhere else, how great Disney is, it might be a 'drag' for Star India."

Paritosh Joshi

Paritosh Joshi, media observer and consultant, Sun Network said, "The deal is not happening because of the Indian or Asian market, it happening because of the US market. There, the television companies are now feeling seriously threatened by OTT and they are actually beginning to lose audience and revenue opportunities to OTT. The entire OTT story is completely subscription-led, not related to ratings much. If money shifts from subscription today, the ad monies will also shift. The issue is more in their home market."

But as far as India programming goes, both Disney and Star India do add to each other's portion.

Though Disney has long been present in India, its play has been limited to the kids’ genre largely. It did have a stake in sports as well with the partnership ESPN had with Star India.

"Disney India has chosen to primarily focus on kids and have not moved out of that space. They have grown their presence there, but they have stuck to it. They don’t really have a substantial stake in the adult entertainment Star, which is largely owned by Star India. On the other hand, Star India has never had a stake in the kids’ genre, they have an option with Fox Kids, but Disney’s kids play is huge. That’s a white space for Star India. They also lost their stake in the youth with the closure of Channel V and since Disney has a presence there too, they complete each other’s portfolio. The joy in India is that their audience are complementing each other, don’t compete," Joshi said.

Talking about how well does the recent elevation of Uday Shankar in 21st Century Fox fit in the proposed deal, Joshi said, "This might have been done to avoid discrepancies in leadership after the deal and to secure a position for Shankar. Disney looks a junior partner in India and Asia market. The recent announcement also indicates the importance of Shankar in the whole scheme of things of Fox."

As per the reports in international media, the news and business news divisions of Fox and its broadcast network and Fox Sports, along with some other sports channels, will remain with Fox.

Comcast, Verizon and Disney were all in talks with Fox for the deal. But the discussions with Disney International are in the final stages.

Multiple media reports suggest that this deal might also break up the Murdoch family, as James Murdoch, the current CEO, 21st Century Fox, might move on to take the top job at Disney. The remaining assets with Fox will be handled by Rupert Murdoch, and his other son Lachlan, both Executive Chairmen at the company.

"If James takes a leadership position at Disney, then things might remain the same for Indian market as he has an experience of managing the Asian market for Fox," a broadcast industry expert said.

Info@BestMediaInfo.com

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