Bob Iger says Disney would like to stay in India, looking to strengthen hand

Bob Iger said Wednesday that Disney “would like to stay” in India and is considering its options in the world’s most populous country where its TV business continues to pull profit but the crown jewel streamer Hotstar is struggling to contain subscriber loss.

Hotstar lost 2.8 million subscribers in the quarter ending September, widening its overall loss to about 23 million in a year at a time when the firm continues to attract more consumers to Disney+. Disney+ added nearly 7 million subscribers in the quarter, making its overall subscriber base top 150 million globally, including those from Hotstar.

The glimmer of hope for Disney is that in the next quarter the company is likely to report a jump in Hotstar’s subscribers count, which currently sits at 37.6 million subscribers – and potentially have a new India partner.

Hotstar has regained many subscribers and attracted tens of millions of non-paying users back to the platform as they follow the ongoing ICC Cricket World Cup. The company is also inching closer to signing a deal with Reliance to sell the India business, according to Bloomberg, as it looks to pare down losses.

Iger told analysts Wednesday that the company plans to slash $2 billion more in costs than previously planned as the firm narrows its losses in the streaming business. Disney has projected streaming profitability in about a year.

Disney’s bigger business in India is the portfolio of a few dozen cable TV channels that it owns in the country. “Our linear business actually does quite well, it’s making money,” said Iger, who returned to Disney as its chief executive late last year, on the earnings call.

“But we know that other parts of that business are challenged for us and for others. And we are looking, I’ll call it expansively,” he added. “We are considering our options there. We have an opportunity to strengthen our hand.”

Reliance-backed Viacom18 spending more than $3 billion on cricket rights for a local, but very popular, cricket tournament has disrupted the Indian on-demand streaming market.

India has emerged as a key market for global technology and entertainment giants in the past decade. But despite its ability to attract a large user base for online services, the country sees a relatively small fraction of these users converting to paying customers.

“A few years ago, when we asked the International head of a large TV Network business about the company’s performance in India, the executive let out a long sigh and said that the Indian business somehow finds a way to break his heart every year,” MoffettNathanson wrote in a report.

“We have also learned this first-hand during our time covering the many iterations of Fox/News Corp (FOXA, OP), which owned Star TV India. Despite promises of reaching $1 billion in EBITDA by 2020, the division always fell woefully short due to the constant need to re-invest in key cricket rights or mobile platform development.”