How JIO’s Masterplan Beat Disney & became the King of Indian OTT? | Business Case Study

Summary

In a landmark move, Disney Plus Hotstar and Mukesh Ambani's Reliance Industries have merged, creating a media giant that dominates India's OTT market. The joint venture, valued at $8.2 billion, gives Reliance control over 63.16% of the entity, with Disney holding 36.84%. This merger follows Reliance's strategic acquisitions of key content rights, including IPL and HBO, which weakened Disney's position. The case study highlights the importance of profitability, building a strong entry barrier, and the power of an ecosystem over individual products in business strategy.

Takeaways

• 📈 The Indian streaming market witnessed a monumental merger on 20th February 2024, with Disney Plus Hotstar entering a joint venture with Mukesh Ambani's Reliance Industries, creating a media giant valued at $8.2 billion.
• 👑 This merger made Reliance the dominant player in the Indian OTT (Over-The-Top) space, owning 35% of the market and commanding a viewership of 750 million viewers across 100+ channels and platforms.
• 🔄 Reliance's majority control (63.16%) of the merged entity, with Disney owning only 36.84%, signifies a major shift in the power dynamics of the Indian media landscape.
• 📊 In 2021, Disney was the leader in the Indian OTT space with 51 million viewers, but by 2024, it faced significant losses and challenges, including the expiration of its IPL streaming rights.
• 🏆 The strategic acquisition of IPL digital streaming rights by Reliance and the exclusive rights to stream HBO content in India dealt a significant blow to Disney's market position.
• 🤝 The merger is a strategic move by Reliance to leverage its diverse portfolio and cross-promote its brands, creating a more integrated and profitable media ecosystem.
• 📉 Disney's global struggles, including a drop in stock price and operational losses, influenced its decision to enter the joint venture with Reliance.
• 🚀 Reliance's aggressive expansion in the media and entertainment sector, starting from 2018 with the acquisition of Balaji Telefilms and leading up to the merger with Disney, demonstrates a calculated path to dominance.
• 🛠️ The business lessons from this merger highlight the importance of profitability, creating non-replicable barriers to entry, and building a powerful ecosystem over standalone products.
• 🌐 The merger is expected to reshape the Indian media landscape, with implications for other players in the industry and lessons for future business strategies.

Q & A

What significant event occurred in the Indian streaming market on February 20th, 2024?

On February 20th, 2024, Disney Plus Hotstar entered into a joint venture with Mukesh Ambani's Reliance Industries, marking the biggest merger in the Indian streaming market of the decade. This strategic joint venture combined a media and entertainment company with an 82-billion-dollar valuation, significantly altering the media landscape in India.

How did the merger impact the ownership distribution between Reliance and Disney?

Post-merger, Reliance controlled 63.16% of the merged entity, while Disney owned 36.84%. This was due to Mukesh Ambani's initial 73% stake in Wcom 18, which merged with Disney Star, and his additional $1.4 billion investment, which increased the joint venture's value to $8.5 billion.

What was the valuation of Disney's India business in 2021, and how did it change by 2024?

In 2021, Disney internally valued its India business at around $5.4 billion. However, by February 2024, the valuation had dropped to $3.9 billion, marking a decrease of $1.5 billion.

What were the three superpowers that Disney acquired with the Star India Network?

The three superpowers Disney acquired with Star India Network were extensive local content through Star's 77 TV channels spanning nine languages, broadcasting rights to major sports leagues like cricket and IPL, and a large audience reach with 700 million viewers.

How did Hotstar's business model differ from competitors like Netflix and Amazon Prime?

Hotstar's business model included both Advertising Video on Demand (AVOD) and Subscription Video on Demand (SVOD), allowing them to cater to a broader audience with free content (AVOD) and simultaneously generate revenue from paying subscribers (SVOD). In contrast, Netflix and Amazon Prime primarily operated on the SVOD model.

What major losses did Disney Plus Hotstar incur between 2021 and 2023?

In 2021, Disney Plus Hotstar's revenue was 1,670 crores, with losses at 600 crores. These losses were reduced to 343 crores in F22. However, between October 2022 and September 2023, Disney Plus Hotstar saw a total loss of 23.8 million subscribers.

What were the key strategic moves made by Mukesh Ambani that impacted Disney's dominance in India?

Mukesh Ambani outbid Disney for the 5-year digital streaming rights of the IPL from 2023 to 2027, made IPL available for free, acquired exclusive rights to stream HBO content in India, and secured a multi-year deal with NBC Universal for films and TV shows, effectively dismantling Disney's competitive edge in the Indian market.

How did the loss of IPL and HBO rights affect Disney Plus Hotstar's position in the Indian market?

The loss of IPL rights meant Disney lost a mass product that catered to a wide Indian audience, and the loss of HBO rights meant they lost access to premium content that attracted a high-end audience. These losses significantly weakened Disney Plus Hotstar's competitive position and subscriber base in India.

What business lessons can be learned from the rise of Jio and the fall of Disney in India?

The business lessons include the importance of profitability, building a barrier to entry that cannot be replicated with money, and the power of an ecosystem over a standalone product. Reliance focused on profitability, created a strong ecosystem with cross-promotion and data advantages, and leveraged their resources to outcompete Disney.

How did Reliance plan to turn the merged entity profitable despite Disney's previous losses?

Reliance planned to leverage its extensive portfolio of companies and brands to advertise and cross-promote their own services, control digital and TV rights of IPL to increase advertising prices, and offer bundled services with their telecom plans to attract more customers and increase revenue.

What was the role of Wcom 18 in the formation of the media giant under Reliance?

Wcom 18 played a crucial role as it had a wide presence across TV broadcasting, cinema, live broadcasting, OTT, and distribution. With its roots in TV broadcasting and a vast array of channels, including popular ones like Nick and MTV, Wcom 18's $4 billion valuation was a key factor in forming the media giant under Reliance.

Outlines

00:00

🤝 The Mega Merger: Disney Plus Hotstar and Reliance

The script opens with the announcement of a monumental merger in India's streaming market on February 20, 2024. Disney Plus Hotstar has entered into a joint venture with Mukesh Ambani's Reliance Industries, marking the biggest merger of the decade. The strategic alliance has created an 82-billion-dollar media behemoth, with Reliance owning 35% of India's OTD market, including 120 TV channels and 30,000 content assets from Disney. This merger has positioned Reliance as the dominant player in the Indian media space, controlling a viewership of 750 million across 100 TV channels and three streaming platforms. The deal has shocked the industry, as Disney, once the leader in India's OTD space, now holds a minority stake of 36.84%, with Reliance controlling 63.16%. The video then transitions to discuss the implications of this merger and how Reliance dethroned Disney in the Indian media landscape.

05:00

📈 Understanding Mergers: The Process and Valuation

The video delves into the mechanics of mergers, using a hypothetical example of two media companies, Think Media and WTF Media, to explain the process. It outlines the steps of individual valuation, where companies assess their intellectual properties, brand value, future cash flows, and net present value of assets and liabilities. The video then discusses ownership distribution, demonstrating how the combined value of the entities determines the stake each party receives in the new venture. Using the example, it shows how additional investment can alter ownership stakes. The segment concludes by drawing parallels to the Reliance-Disney merger, highlighting how Mukesh Ambani's strategy mirrored the hypothetical scenario, allowing Reliance to gain significant control over the joint venture.

10:01

🏆 Disney's Journey and Reliance's Ascendancy in India

The narrative continues with a timeline of Disney's operations in India, from its inception in 2004 to its acquisition of UTV and subsequent ventures into film production and the launch of various channels. It discusses Disney's acquisition of 21st Century Fox, which gave them control over Star India Network and access to a vast audience. The video then contrasts Disney's success with its losses and the strategic moves by Reliance, which included outbidding Disney for IPL streaming rights and acquiring exclusive rights to HBO content in India. It details how Reliance systematically dismantled Disney's dominance in the Indian OTD market, leading to a significant loss of subscribers for Disney Plus Hotstar and forcing them into a position where a merger with Reliance seemed inevitable.

15:03

💡 Business Lessons from Disney's Decline and Reliance's Rise

The video concludes with key business lessons learned from the rise of Reliance and the fall of Disney in India. It emphasizes the importance of profitability, the need to build an unbreachable barrier to entry, and the power of an ecosystem over standalone products. It reflects on how Reliance's strategic investments and focus on profit allowed them to dominate, while Disney's losses and failure to establish a strong competitive edge led to their decline. The video also touches on how Reliance's diverse empire can leverage the merged entity to increase profits and market share, suggesting a transformative impact on the Indian media landscape.

Keywords

💡Mergers and Acquisitions

Mergers and Acquisitions (M&A) refer to the consolidation of companies or assets through various types of financial transactions. In the context of the video, it describes the strategic joint venture between Disney Plus Hotstar and Mukesh Ambani's Reliance Industries, which is considered the biggest merger in the Indian streaming market. This M&A deal has significant implications for the media landscape in India, as it combines Disney's content assets with Reliance's extensive media and entertainment holdings.

💡Market Share

Market share represents the percentage of the total market that a company or product controls. In the video, it is used to illustrate the dominance of the merged entity in the Indian OTT (Over-The-Top) space, with the new company owning 35% of the entire OTT market in India, commanding a viewership of 750 million viewers across 100 television channels and three streaming platforms.

💡Intellectual Property (IP)

Intellectual Property (IP) refers to creations of the mind, such as inventions, literary and artistic works, designs, and symbols used in commerce. In the context of the video, Disney's IP includes its shows, brand value, and future cash flows, which are essential components in the valuation process during the merger with Reliance Industries. The value of these IPs contributes significantly to the overall valuation of the joint venture.

💡Valuation

Valuation is the process of determining the economic value of an asset or a company, often based on its financials, assets, liabilities, and future earning potential. In the video, valuation is crucial for the merger between Disney and Reliance, as it helps determine the ownership distribution and the value each party brings to the joint venture.

💡Ownership Distribution

Ownership distribution refers to the proportion of shares or equity that different parties hold in a company or joint venture. In the video, it explains how the ownership is divided between Reliance and Disney in their joint venture, with Reliance practically controlling 63.16% and Disney owning 36.84%.

💡Viewership

Viewership refers to the total number of viewers or the audience size for a particular media content or platform. In the video, viewership is a key metric used to demonstrate the reach and influence of the merged entity in the Indian media space, with the combined platform catering to 750 million viewers.

💡Content Assets

Content assets are the digital or physical materials used to create media like videos, music, written works, etc., that are owned or licensed by a company. In the video, Disney's content assets are a significant part of the merger, as they include a vast library of shows, movies, and other media content that contributes to the value of the joint venture.

💡Strategic Business Moves

Strategic business moves are calculated decisions made by a company to achieve long-term goals, often involving significant changes in operations, partnerships, or market positioning. In the video, strategic business moves are exemplified by Reliance's acquisition of rights to stream IPL and HBO content, which were instrumental in dethroning Disney as the leader in the Indian media space.

💡Ecosystem

An ecosystem, in a business context, refers to the interconnected network of products, services, and platforms that a company offers, creating a comprehensive and often exclusive user experience. The video emphasizes the power of an ecosystem over standalone products, as seen with Reliance's integrated approach to media and telecommunications, which provides a competitive advantage over companies like Disney that focus on individual products or services.

💡Business Lessons

Business lessons are insights or principles derived from analyzing business strategies, outcomes, and market dynamics. The video provides several business lessons, such as the importance of profit, building a barrier to entry, and the strength of an ecosystem. These lessons are meant to guide businesses in making strategic decisions and understanding market dynamics.

Highlights

On 20th February 2024, Disney Plus Hotstar and Mukesh Ambani's Reliance Industries entered into a strategic joint venture, marking the biggest merger in India's streaming market.

Post-merger, the new entity owns 35% of India's OTT market, 120 TV channels, and 30,000 content assets from Disney, commanding a viewership of 750 million viewers across 100 TV channels and three streaming platforms.

Reliance will practically control 63.16% of the merged entity, while Disney owns 36.84%, a significant shift from Disney's dominance in the Indian OTT space in 2021.

The merger exemplifies how Reliance dethroned Disney as the king of the Indian media space, raising questions about Disney's business strategy and the competitive landscape.

Disney's valuation for its India business dropped from $5.4 billion in 2021 to $3.9 billion in 2024, indicating a loss of $1.5 billion in just two years.

Disney's losses in India were significant, with the company incurring heavy losses despite its market leadership and extensive content library.

The loss of IPL digital streaming rights to Reliance in 2023 was a major blow to Disney, as it lost a key driver of customer acquisition and revenue.

Reliance's acquisition of exclusive rights to stream HBO content in India and a multi-year deal with NBC Universal further weakened Disney's content advantage.

Disney's global operations also faced challenges, with its stock price dropping to its lowest level in 9 years in 2023.

Reliance's ecosystem of over 250 companies across various sectors provides a unique advantage in leveraging the merged entity's potential for profit.

The merger allows Reliance to control both digital and TV rights of IPL, potentially increasing advertising revenue and market share.

Reliance's strategy of building a profitable venture in Jio before expanding into other industries serves as a lesson in sustainable growth and profitability.

Creating a barrier to entry is crucial for maintaining competitive advantage, as demonstrated by Disney's inability to prevent Reliance from outbidding them for key content rights.

An ecosystem approach to business is more powerful than focusing on a standalone product, as seen with Reliance's dominance in both telecom and media.

The Disney-Reliance merger is expected to significantly alter the Indian media landscape, with implications for consumers and the industry as a whole.

The case study of Disney and Jio's battle in India provides valuable business lessons on profitability, competitive barriers, and the power of a strong ecosystem.

Transcripts

hi everybody on 20th of February 2024

the streaming Market of India witnessed

the biggest merger of the decade this is

when Disney plus hot star entered into a

joint venture with Mukesh duai Amani

Disney announcing that it is emerging

its India TV and streaming business with

the country's top conglomerate Reliance

Industries strategic joint venture of of

a media and entertainment company an 82

billion do Behemoth in the media space

and the reason why this is a very very

big deal because with this merger mukes

Amani has practically become the king of

Indian otd space because now this entity

alone owns 35% of the entire otd Market

of India 120 television channels and

30,000 content assets of Disney in total

this entity alone will command a total

viewership of 750 million viewers over

100 television channels and media and

entertainment space with three streaming

platforms with an impressive

International catalog and also the

largest offering and portfolio of

sporting events in media Winner Takes it

all and this will become the Big Daddy

of Indian media 750 million viewers

across India uh is what this is going to

cater towards is what these companies

are saying and you know what Reliance

will practically control

63.16% of this merged entity and Disney

owns only 36.84% and this is is

absolutely shocking because in 2021

Disney was the king of the Indian otd

space if you don't believe me look at

this chart while Amazon Prime had 22.3

million views Netflix stood at 6.1

million views and Disney plus hot star

touched a viewership of 51 million views

and if you look at Gio Gio was nowhere

in 2021 but even then in Just 2 years

something crazy has happened and

suddenly Reliance has become the king of

the Indian media space so the question

is how did Reliance Dethrone Disney as

the king of the Indian media space what

was mukes Amani's genius business

strategy to beat a 100-year-old giant

like Disney in India how did Disney lose

this business war with Gio in spite of

having so much money and so much

resources and as students of business

what are the lessons that we need to

learn from this epic business

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description and now on with the

episode to understand this merger of the

decade and why Disney lost we first need

to understand how a merger fundamentally

takes place so let's understand this

using an example let's say there are two

media companies think media and WTF

media and they wish to merge their

operations so the first step to this

process is to settle on something called

individual valuations this means both

entities need to First calculate their

own value for media companies this

valuation is done by counting a

company's intellectual properties like

shows plus brand Value Plus future cash

flows plus net present value of assets

and liabilities so let's say things

school has assets worth $12 million and

liabilities of $2 million so its Net

Present Value based on assets and

liabilities would be $ 12us $2 million

equal to $10 million similarly its IP

and brand value are estimated at $5

million and the present value of its

projected future cash flow is $15

million so think school's overall

valuation would be $10 million plus $5

million plus $15 million equal to $30

million similarly WTF media might have

assets worth $5 million and liabilities

of $1 million so its Net Present Value

would be $4 million if its IP and brand

value are worth $10 million and the

present value of the future cash flow is

estimated at $6 million then WTF media's

valuation would be $4 million plus $10

million plus $6 million equal to $20

million this is the first phase of a

merger which is valuation if this is

clear let's come to the Second Step

which is ownership distribution now

based on the values of think and wdf the

value of this entire Venture is $20

million plus $30 million which is $50

million So based on this valuation think

media gets 60% stake while WTF media

will get 40% of this new entity let's

call this new entity Indian business

podcast but now nikil Kat comes in and

says that he wants to invest another $10

million and then this fresh infusion of

cash will change the valuation of the

Indian business podcast so now the

Indian business podcast is valued at 20

million + 30 million plus 10 million

which is $60 million

so now think media which brings in $30

million in value will own 50% of the

entity whereas WTF brings in $20 million

which will own 33% of this entity and

nikl individually will own 177% in this

new entity but now if you see

practically nikil owns both WTF media

and his own stake so nikil has 50%

ownership of the Indian business podcast

this is how nikil can increase his stake

if the stakeholders agree to have is

Cash input if this is very very clear to

you let's come to the Reliance Disney

merger because this merger is very

similar to the merger that we just

discussed and mukes Amani acted very

similar to how nikil kamad acted in this

hypothetical joint venture you see

Mukesh Amani has a 73% stake in wcom 18

and wcom 18 merged with Disney star

which is Disney's India arm while wcom

had a holding value of $4 billion Disney

transferred most of its assets to Disney

star giving it a holding value of $3.1

billion and just like nikil pumped in

$10 million into the Indian business

podcast Mukesh Amani pumped in an

external investment of $1.4 billion and

this brought the total joint venture

value to $8.5 billion so essentially

Reliance will have a direct stake of

16.34% because of Amani's 1.4 billion

wcom 18 will have 46. 182% because of

its $4 billion valuation and Disney will

own 36.84%

of the joint venture and since Ambani

owns a significant chunk of wcom 18

Reliance will practically control 63.16%

of this merged entity now I don't know

if you noticed this equation but what is

very surprising in this equation is the

low valuation of Disney because if you

remember in 2021 2022 Disney had

internally valued its India business at

around $5.4 billion this included star

India Disney and Disney Plus hotstar and

today in February 2024 which is 2 years

after this valuation the same valuation

has dropped from 5.4 to 3.9 billion and

that is a difference of $1.5 billion so

the question is what happened in the

past 2 years and where did things start

going wrong for Disney to understand

this let's put it in a timeline and take

you through a quick history of Disney in

India you see back in 2004 Disney

independently started operations in

India and after the success of the

Disney Channel

they went on to acquire hungama TV which

was owned by UTV by 2012 Disney bought

out UTV to venture into the film making

business and in spite of a few hit

movies the company was still making

losses so with no success in films it

closed his production arm in 2016 then

in 2017 Disney made another acquisition

and paid 71.3 billion for a large

portion of 21st Century Fox the

Blockbuster Disney deal the pair company

of ABC buying many of the assets of 21st

Century Fox creating an entertainment

Giant in a move that would reshape the

entertainment industry large parts of

what belonged to 21st Century Fox would

become the property of Disney and with

this deal Disney took over Fox's

business in India where they got their

Golden Goose which is none other than

the star India Network now just to give

you better context this star group alone

owns 77 TV channels like Star Gold Star

Plus Star Sports and even hotstar so

star is literally a Crown Jewel of the

Indian media space with an audience of

700 million people and I don't know if

you've noticed this but then every

member in your family consumes at least

one star Channel while moms watch Star

Plus my grandma watches star VI which is

a Tamil Channel and we Millennials we

watch Star Sports along with our father

so for Disney with just this one move it

got access to a market of 700 million

people then in 2020 Disney merged its

newly created Disney plus with hotstar

to embrace the otd wave in India and

that too during the pandemic so do you

realize this is some unreal timing and

that to with the best players in the

market merging together with Disney who

was the Godfather of media in the entire

world so Disney was practically killing

it in India and became a market leader

by 2021 with a 30% market share in otd

look at this chart while Netflix total

offerings were original movies and shows

created by them Disney Plus hot Stars

Library consisted of star Disney and HBO

exclusive content and this also included

the rights to two of the most legendary

Series in the world which were from

Marvel Cinematic Universe and the iconic

Game of Thrones and both of them were

massive hits in India and across the

world and this got them the most premium

audience in India so with this

acquisition Disney acquired three

magical superpowers that nobody had in

India firstly star India gave Disney the

insane Act of local content now in a

country where nearly 24 languages are

spoken star's 77 TV channels spanned

across nine languages so star was one of

the most important instruments to

capture India as a whole secondly they

spent billions to broadcast some of

India's biggest sports leagues including

our national Obsession cricket and IPL

they went so bullish on Sports in 2017

that they backed a $2.6 billion deal to

stream the IPL for 5 years and we all

know how IPL became a crown jeel for hot

star for those who don't know IPL 2020

brought in 7.2 million views for hot

star on the first day itself this is how

IPL became a catalyst of customer

acquisition for hotstar IPL today is not

only the fastest growing but is also the

second most valuable sports league in

the world for the match between Chennai

Super Kings and Kolkata Night Riders

viewership for the game peaked at a

whopping 5.5 million concurrent viewers

this is the largest on AR my platform

for any live sporting event in the world

hotstar as a platform is a market leader

uh you know for sports content close to

80% of the revenue are Cricket driven on

top of that unlike other players in the

market hotstar had two models of Revenue

and this made them very very powerful

they had both advertising video on

demand as well as subscription video on

demand model for those who don't know

avod is a model where the platform

doesn't make money from the audience

subscription but they make money from

ads that run while the viewers watch the

content for free for example YouTube is

a avod platform where we watch content

for free and the Creator and the

platform make money with ads whereas

svod or subscription based video on

demand is a model where the platform

makes money from the subscribers and

without paying for it the subscribers do

not get access to any of the content so

while Amazon Prime and Netflix were

operating with svod models and limited

the number number of viewers they had

hotstar very smartly had both avod which

was free for everyone and svod for

paying customers this way they could get

the access to a large audience with avod

and they could make money with

subscribers simultaneously with svod and

even in svod hotstar was so

competitively priced that their annual

pack started at $14.99 per year which

was the same as Amazon Prime and in avod

also they had another plan which was

both free and premium which started with

just 4.99 rupees per year so if you

remember this was an avod plus svod

model where for a small fee you get

exclusive content but you will see it

with ads this is how hotstar got the

reach of avod and the revenue of the

svod model these are the three

superpowers that hotstar brought in with

Disney and cherry on the cake were the

bundles now if you remember we all got a

hot star subscription along with our

prepaid recharge packs right and when we

looked deeper we found out that while

Amazon Prime had Partnerships only with

Gio and Airtel Netflix had a bundle deal

only with Vodafone and that to with a

postp plan of over 1,99 rupees whereas

Disney Disney partnered with all three

Telecom Partners including Gio airel and

vone so this heavily increased their

viewership as Disney became more

accessible to the users and you know

what all this put together they

skyrocketed Disney plus hot Stars

viewership to such an extent that like I

showed you in the intro in November 2021

while Amazon Prime stood at 22.3 million

views Netflix stood at 6.1 million views

and Disney plus hot start test a

viewership of 51 million views so do you

see Disney was practically the king of

otd in India then the question over here

is what exactly was the problem and how

did a newb like Gio come and kill

Disney's dominance in India well as it

turns out ever since its launch in 2019

Disney plus had been in losses so even

though Disney p in millions of dollars

into acquiring subscribers and avod and

bundles they have been incurring very

heavy losses look at this chart while

Disney plus hot star's Revenue was 1,670

cror in 2021 its losses were 600 crores

and these losses were reduced to 343

crores in F22 so it almost looked like

Disney plus hotstar was just about to

become profitable right well this is

where there was a Twist in the tail

because this is when they are 5-year

license of IPL got expired and as we all

know this is where Mukesh Amani stepped

in in June 2022 wcom 18 outbid Disney's

$2.89 billion with a 5-year Digital

streaming rights of the IPL from 2023 to

2027 so even though Disney retained the

television rights of IPL it was still a

very heavy blow for Disney and this is

when out of nowhere Gio made a

revolutionary announcement and made IPL

free the IPL is one of the richest

Sports properties in the world making it

the only cricket league in the world to

crack the top 20 most valuable media

rights deals in all of professional

sports I has a viewership of almost 700

million people the Reliance owned Ott

platform has shattered world records for

the most current Ott views to RI own

geoc Cinema successfully streamed the

IPL 2023 for free so potential to grow

this viewership immense massive and IPL

is such a big crowd pillar guys that in

2023 alone IPL attct attracted 449

million viewers which is practically 1/3

of the entire Indian population now I

don't know if this is because of the IPL

or not but between October 2022 to

September 2023 Disney plus hot star saw

a total loss of 23.8 million subscribers

so when Disney lost IPL it lost its

first Golden Goose which was a mass

product for India this is when in April

2023 Mukesh Amani took away the second

jeel from Disney by buying the exclusive

rights to stream HBO content in India

now if you know HBO you would know that

the most premium audience in India

watches HBO and just like Game of

Thrones in 2019 in 2023 the most premium

audience in India was watching

succession House of dragons and Last of

Us and guess what Mukesh Amani did not

stop here he further went on to make a

multi-year deal with NBC Universal to

get another thousand hours of films and

TV shows now again I don't know how many

of you know this but NBC has the rights

to some of the most valuable and perhaps

the most popular shows in India and this

includes the office friends and Brooklyn

99 this is the third snatch that Amani

made so do you see this Mukesh Amani

essentially broke Disney's otd business

step by step and you know what Disney's

trouble did not stop here also Disney's

TV business in India was also suffering

losses in the first 9 months of fi23

itself star Sports reported an operating

loss of $444 million so Disney failed

with hot star star and even with its

Global operations in fact in 2023

Disney's stock price dropped to $82.4

something which is its lowest level in 9

years this is because they've been

incurring losses not just in India but

all across the world we've been talking

about a Disney stock closing now at its

lowest level in more than 3 years

yesterday we're talking about Disney

today here is the intraday price action

you can see we are just off the lows

here what caused this calamitous decline

here they got Myriad problems uh at

Disney you don't need to look for more

problems to figure out what's going on

at Disney now if this Disney story is

very very clear to you let's understand

how Mukesh Amani started laying the

foundation for this merger from 2018

itself well if you look at Gio they had

always been ambitious in the media space

while Geo Cinema geot TV and Geo music

were seen as just indianized version of

Netflix and Spotify in reality Reliance

was just laying the foundations to

dominate India and from 2016 onwards

this is what their trajectory looked

like in 2017 they bought stake in Balaji

tele films to provide Goot TV with

content and in 2018 they merged Geo

music with saon then in 2022 Reliance

made a big business move and merged geoc

Cinema with wcom 18 now to give you an

idea about how big wcom 18 is look at

this chart wcom 18 has its roots in TV

broadcasting and a v WID sped presence

across Cinema live broadcasting Ott and

even distribution it starts from a kids

channel like Nick and goes all the way

to sports to MTV to the entire I repeat

entire colors family in total they

operate across nine Indian languages and

have 38 channels including the otd

streaming platform wood so Reliance

merged with wcom 18 to form a media

Giant in 2022 this is the reason why in

total its current holding Val value of

all of its assets came to $4 billion and

this was bigger than Disney India's

valuation at the time of their merger so

when Disney was stripped of NBC HBO and

IPL Gio made them an offer that they

could not refuse so now the question is

when Disney streaming was in losses why

did Reliance take over such an industry

and how will Reliance make a profit when

Disney failed in India well again to

understand this we studied multiple

possibilities and if you look at this

chart there are more than 250 companies

under the Reliance Empire this includes

everything from retail to

telecommunication to entertainment to

textiles to even Consumer Finance and

along with that they have big Brands

like AIO bookm show netmeds and Hames

and this brings three superpowers at

Gio's disposal firstly instead of just

relying on thirdparty platforms like

YouTube Reliance will also have a large

pool of data and channels to advertise

their own Brands so when they own both

The Advertiser and and the channel their

own Revenue will just go from one

company to another company it's like

backward integration but in advertising

secondly with this Disney merger mukes

Amani practically controls both digital

and TV rights of IPL so if anyone wants

to advertise in the IPL they have to go

through motab only which means because

they are practically a monopoly they can

increase the prices of advertising as a

result they have a much bigger benefit

and lastly you tell me guys if you're

deciding between G and AEL if Gio starts

offering a data plan that includes free

access to IPL plus International shows

from HBO plus NBC plus hot star wouldn't

you switch from Airtel to Gio if you

just said yes you know what this is this

is Geo's opportunity to snatch nearly

$18 billion in revenue from airel and

then again they can increase their

prices so if mkes Amani uses his

superpowers to turn profitable with this

merger and take a lead with Gio against

etel it will be a revolutionary move

this is what we could find about the

legendary rise of Gio and the fall of

Disney in India and by the look of it it

seems like this merger will change the

Indian media landscape

forever and this brings us to the last

part of the episode and that are the

business lessons that we need to learn

from the incredible rise of the inanis

lesson number one no matter how much you

scale ultimately the most important

superpower will always be profit profit

and profit because with profit profits

you can buy any company but without

profits eventually a billion doll

Revenue will just be a ballooned

illusion of success in this case First

Reliance used their own resources to

build Gio they turned Gio into a

profitable Venture and then they

ventured into other Industries now do

you realize they have done this in spite

of having unlimited capital and they did

not scale with just losses so when mukes

Amani is rooting for profit I think all

of us should lesson number two unless

you build a barer to entry that cannot

be replicated with money any big player

with Deep Pockets can just dismantle

your company in this case while Disney

is strong with content like Marvel in

India somehow they could not build a

barrier to entry because of which Gio

simply had to just buy the rights off

and kill their competition and lastly

like I always said ecosystem is always

more powerful than a standalone product

and this is something that we all need

to strive and build in this case while

AEL and Disney are champions in their

own domain somehow Gio is becoming a

mammoth in both Telecom and media and

this is both fascinating and frightening

at the same time these are the business

lessons that we need to learn from this

iconic battle between Disney and Gio and

I just hope you learn something valuable

from this case study that's all from my

side for today guys if you learn

something valuable please make sure to

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you so much watching I will see you in

the next one

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bye-bye

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