Disney today is more than just a fun kids' brand. It has become one of the most formidable names in entertainment with brands like Star Wars and Marvel in its kitty. Late last year it stepped up its game by entering the on-demand business with its very own offering, Disney Plus. In today's post, we look at the power of the Disney franchise and how well it has grown till now, discuss the strength of Hotstar's position driven by both sports and regional content libraries from Star, and how Disney plans to leverage that dominant position to enter the Indian markets.[Subtle flex - We had called Disney's market entry strategy in our post from December last year]
Disney Plus - The story till now
The battle between content providers and on-demand service providers was imminent, as one inevitably tries to squeeze the other believing in the value it brings to the partnership. Netflix in anticipation of this move, and fallouts that could arise from it, had begun positioning itself well, developing and pushing its own content. With extensive analytics on the types of shows customers like and lenders willing to pour in money as the firm stacks up debt to grow its library saw the rise of Netflix's content libraries.
Late last year, Disney launched its much anticipated Disney Plus service, bringing one of the most extensive content libraries with them. Since then the firm has seen an exponential growth in subscribers since then breaching the 30 million mark. It now has its eyes set on the developing markets, India chief among them. With its large potential user base made accessible by the rise of Jio, India will be the next major battleground for the on-demand content wars. Luckily for Disney, it has a controlling stake in India's current largest player, Hotstar. and it's a partnership it plans to milk well.
The Hotstar Advantage
Hotstar reported more than 300 million active users in the month of the last IPL. By size, it is by far the largest on-demand content provider in India and has a 'right to win' in the market driven by a unique combination of Star's content and sports content. Star is one of the most popular general entertainment channels in India giving Hotstar ready access to a very rich library of Indian language general entertainment. That combined with the IPL, one of the most awaited sporting events in India makes its overall strength enviable.
The entry of Disney plus makes the offering extremely attractive to two other end markets - kids via Disney's libraries, and Millenials via Marvel and Starwars making the package attractive to the complete family, aiding not only member growth but premium multi-account sales.
The Market Entry strategy
Like most things, Disney's India entry too seems to be timed to perfection, with the launch scheduled on 29th March, coinciding perfectly with the launch of the IPL. The period that sees one of the heaviest traffics to the site will provide a great platform to introduce the customers hitherto unaware of the offering to Disney Plus, and tap into the massive Indian market. As Netflix and Prime fight it out to get a larger piece of the pie, the entry of Disney Plus Hotstar tilts the balance further towards a clear market leader.
About the Author: The post is written by Ganesh Nagarsekar. Ganesh is a graduate from IIM Calcutta and has worked with J.P. Morgan and Goldman Sachs, before founding GSN Invest.