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Disney to adopt Star India model in emerging Asian markets

Kevin Mayer described Star India as the crown jewel in the Fox acquisition

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BALI: Leadership conversations at APOS 2019 kicked off with the company that continues to grab all the headlines. Disney, fresh off its formal acquisition of 21 Century Fox, put on quite a show at its recent Investor Day offering the world a glimpse of what the future of the entertainment and media behemoth will look like.

On Wednesday, Walt Disney direct-to-consumer and international segment chairman Kevin Mayer further expanded on the company’s vision, as he opened the series of dialogues at the tenth edition of APOS.

Mayer was full of praise for Walt Disney Asia Pacific president and chairman Star and Disney India Uday Shankar, highlighting the latter’s contribution to building a robust business in the country with Star’s television channel network and streaming platform Hotstar.

While one out of every four hours of television content consumption in India happens on the Star network, Hotstar crossed the 300 million-mark, for monthly active users, making it among the biggest over the top platforms in the world.

Mayer revealed that Disney would deploy the successful Indian business model built by Shankar in other emerging Asian markets.

“Star India is the type of model we’d like to see throughout Asia, not exactly, but traditional TV moving over the top in a very significant way. If we see that in south-east Asia, we’d be very pleased,” he said.

The long-time veteran of the company described Star India as the crown jewel of the Fox acquisition. According to him, the high-profile deal with Rupert Murdoch was struck to fuel the company’s growth in Asia and India. The senior executive pointed out that Asia was “super important” to Disney’s growth plans.

Mayer also highlighted that Disney had been analysing the benefits of direct-to-consumer (D2C) business for over five years.

"Going all in with the new business model, disrupting the film business is not taken lightly,” Mayer said.

Disney, explained Mayer, saw two major benefits of adopting a direct-to-consumer approach.

“The only way to get data of people’s affinities, habits and viewing patterns is to have a direct relationship with them. We can then use that data to personalise the service and serve the consumers better," he said.

With Disney operating some of the world’s most recognised and powerful brands, the D2C service will help propel the company’s financial growth strategy, Mayer added.

"There’s a whole part of the value chain that doesn’t rely on third parties. And that distribution value chain doesn’t require massive infrastructure anymore. It requires the right brands, the right videos, and the way to inject that video onto the internet. You can do that. You can have a high-quality distributor. We have the brands that work, brands that matter, therefore built-in equity with consumers and the advantage to get people to view our product online outside of a traditional TV bundle," he said.

At its Investor Day in Burbank, Disney revealed the launch date and pricing of its much-anticipated streaming service Disney+. That’s led to analysts and the media endlessly debating about a Disney vs Netflix clash.

Mayer, however, feels Disney+ will co-exist in the marketplace with existing platforms.

“We’re not after being bigger than Netflix or beating Netflix," he said. "Netflix is a very high-quality service, we’re offering entirely different content. We’d just like to serve consumers well."

Disney, however, intends to throw all its might behind its streamer when it launches later this year in November. That includes using the synergies from various businesses like theme parks, TV networks, and film to power Disney+, which has been priced at $6.99 and has a $1 billion programming budget in its first year.

“We’ll utilise those fully and aggressively, for sure,” Mayer said.

Disney has given up on licencing revenue running into millions to set up its own D2C business, which will now pay these fees for the use of product created by the content segment.

“Investors will be able to value the traditional Disney, which we made whole because of the payments we’re making, and the new part of the Walt Disney Company, which is our D2C business," Mayer explained.

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