How Ambani killed HOTSTAR step by step? Netflix next? : Business case study

Jio Cinema vs. Disney+ Hotstar: केस स्टडी

Key Concepts:

1. Introduction: The Rise of Jio Cinema

India vs. Pakistan cricket matches break viewership records, highlighting the massive potential of the Indian entertainment market.
In 2021, Amazon Prime Video had 4.6 crore viewers, and Disney+ Hotstar dominated the OTT market.
Jio Cinema, initially an underdog, disrupted the industry through strategic moves.
The merger between Jio Cinema and Disney+ Hotstar, valued at $8.5 billion, received CCI approval.
The new Jio Cinema boasts over 3 lakh hours of content across 19 languages.
Jio Cinema has become the "Shahanshah" of the Indian OTT market, reaching 45 crore people.

2. Disney's Initial Foray into India (2004):

Disney entered India in 2004, capitalizing on the growing cable TV market.
Acquired Hungama TV and UTV (in 2012) to produce movies.
UTV had a successful track record with films like "Rang De Basanti," "Jodhaa Akbar," and "Kai Po Che."
Disney's initial movie productions like "Mohenjo Daro," "Fitoor," "Katti Batti," and "Jagga Jasoos" failed at the box office, leading to the closure of their production business in 2016.
Disney acquired 21st Century Fox, including Star India network (Star Plus, Star Gold, Star Sports) and Hotstar.

3. The OTT Boom and Disney+ Hotstar's Dominance:

Jio's entry into the telecom market with affordable data plans boosted the OTT market.
The Indian OTT market was projected to grow at 22% to reach ₹12,000 crore in the next four years.
Disney gained access to 70 crore Indian households through the Star network.
The COVID-19 lockdown significantly increased viewership on OTT platforms.
Disney merged Disney+ and Hotstar, creating a powerful combination.
Popular series like Marvel Cinematic Universe shows and "Game of Thrones" attracted a large premium audience.

4. Disney+ Hotstar's Strengths:

Local Content: Star had 70+ TV channels in 8 languages, providing access to a diverse Indian audience.
Sports and IPL Viewership:
- Disney+ Hotstar achieved 5.9 crore concurrent viewers during the ICC Men's Cricket World Cup 2023 semi-final.
- Star India paid ₹16,000 crore for 5-year IPL broadcasting rights in 2017.
- IPL 2020 saw 70 lakh people watching on Hotstar on the first day.
Business Model (AVOD + SVOD):
- AVOD (Advertising Video on Demand): Free content with ads (e.g., YouTube).
- SVOD (Subscription Video on Demand): Paid subscription for ad-free, exclusive content (e.g., Netflix).
- Hotstar used a hybrid model, attracting a large audience with free content and converting some to paid subscribers.

5. The Turning Point: Jio Cinema's Strategic Acquisitions:

Disney+ Hotstar's IPL digital rights agreement expired in 2022.
Viacom18 (backed by Mukesh Ambani) acquired the IPL digital rights for the next five years with a bid of ₹20,500 crore.
Disney+ Hotstar lost approximately 2.5 crore subscribers after losing the IPL rights.
In April 2023, Jio Cinema acquired HBO streaming rights, attracting a premium audience.
Jio Cinema signed a multi-year deal with NBCUniversal, acquiring popular series like "Friends" and "Brooklyn Nine-Nine."

6. Jio Cinema's Strategy and Advantages:

Jio Cinema can offer free content due to Reliance's financial strength and other revenue streams.
Jio Cinema can increase ad costs due to high viewership.
Jio Cinema can integrate content with other Jio services (e.g., JioTunes).

7. Business Lessons:

Profitability is Key: Disney had high viewership and subscribers but struggled to achieve profitability.
Ecosystem Control: Controlling the ecosystem is crucial for market dominance. Jio integrated media and data networks, allowing them to absorb losses in one area and profit in another.
Business Timing: Mukesh Ambani strategically timed acquisitions and learned from competitors' mistakes.

8. Conclusion:

Jio Cinema's success is attributed to strategic acquisitions, a focus on profitability, ecosystem control, and perfect business timing.
Disney's failure to capture the Indian market stemmed from a lack of understanding of the local market and an inability to achieve profitability.
Jio Cinema has transformed the Indian OTT landscape by prioritizing strategic timing and ecosystem control.