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Corona: The ugly witch in Disney's India love story

Most of us must’ve heard the story of Rapunzel as kids, and it’s been popular in the past couple of days as the folktale is set in a village called Corona. Let me give you a brief recap of the story before we dive deep into the cold world of business - Rapunzel(India) has magical long hair(huge young population) is kidnapped by the ugly witch(Covid-19) and grows up in isolation for a long time. A prince(digital content) falls in love with Rapunzel, they plan to escape but the witch gets hold of this and cuts Rapunzel’s hair.


In today's post, we look at why the India opportunity is so alluring for OTT players, why Disney had the perfect entry strategy via Hotstar, and why it may now have to pivot or wait.


The India opportunity


Thanks to the data revolution brought about by Jio a couple of years ago, India was online and hungry for content. (about 735 million users). This meant video-making apps like TikTok overtaking Facebook in # of downloads, and video streaming apps started popping up in dozens.


The OTT market is set to grow 22% reaching 12,000 crores in the next 4 years. The market is flooded with dozens of players ranging from Netflix, Amazon Prime to Sun Nxt, Alt Balaji on the other end to vernacular players like Hoi Choi, Aha and Times Group-owned MX Player which pivoted from a video playing software to OTT. Any market with dozens of players, all innovating meant saturation and bigger hurdles for new entrants. This is where Disney stood. A prince unable to enter the castle without support.


The perfect entry plan


To a country for which cinema and cricket are religions, IPL combined them both and became the jackpot for HotStar which paid Rs. 3,200 crore per year for a 5-year contract. In 2019, this meant 462 million people watched it. This audience isn’t bound by rural/urban divide and is spread across all languages. Star was originally owned by 21st Century Fox and came under Disney in its $ 50 billion deal in 2017.


Disney saw the perfect launch opportunity in India with this IPL season. They already have the content bursting to be mined. IPL brings in half of India onto the platform. But Corona has thrown a wrench in the gears. IPL has been postponed to April-15 as the government has banned any large gatherings. With the latest 21 day curfew, the witch seems to have successfully isolated the princess.


The Pivot


As said by India’s wealthiest movie star (who happens to own an IPL team), “Picture abhi baki hai mere dost”. The Telecom industry has said it’s facing pressure on the 4G infrastructure (20% compared to last month) and has ordered 11 streaming platforms like Netflix, Hotstar, Amazon Primer to cut HD streaming. This means more people are using the network, which is obvious given the lockdown.


So Disney can still launch their content onto the platform as more people are glued to their screens. But we should remember this becomes a long drawn process of user acquisition, with the cost-conscious Indian consumer not willing to spend money on digital goods in these uncertain times.


With IPL probably getting canceled this year, the ball falls in Disney’s court. Will they wait this virus out for the next big event or take the plunge and take the long-drawn route? Will the witch succeed in capturing Rapunzel or will the prince be united with her?


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About the Author: The post is written by our EZPP partner Jayadiya Sirasani with relevant edits and changes by our editorial team. Jayadiya is a graduate from IIM Calcutta, currently working with Accenture Strategy.

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