India Will Be The Next Battleground For Disney and Netflix

As Disney ramps up efforts with its streaming service, it is beginning to turn the screws on Netflix in the key Indian market

Feb. 18, 2020

With more than 1.3 billion people, India is a surprisingly untapped market, and one which streaming giants Disney (NYSE: DIS) and Netflix (NASDAQ: NFLX) are vying desperately to control.

The streaming wars heat up

India has become a battleground in the so-called streaming wars that may become as crucial to streaming services as Gettysburg was to the Union. In 2019, viewership in the country rose to 325 million, up from 300 million in 2018, and is expected to rise to 550 million by 2023.

Netflix has been putting in a massive effort to boost its presence on the continent, working closely with Bollywood to create titles such as ‘Bard of Blood’ and ‘Chopsticks’. In terms of viewership, Netflix is second-to-none in India, with revenue in the region growing eight-fold in 2019 according to its regulatory findings. It also launched a mobile-only platform in India last July for less than $3 a month which helped with this growth.

Other services are attempting to replicate this success, however, with Apple (NASDAQ: AAPL) launching its service in the country at $1.40 per month, though its success is yet to be determined.

Amazon (NASDAQ: AMZN) is another company that has enjoyed success in the region, as it steadily begins to grow its own original pan-Indian content in English, Hindi, Tamil, and Telugu. Instead of hyping this up on social media and massive marketing, Amazon has focused on the quality of its content, attracting big Bollywood names to successful projects such as “Made in Heaven” and “A Family Man”. In 2016, there were approximately 23.6 million Amazon Prime Video subscribers in North America. This figure is projected to increase to 46.3 million in 2020.

Despite this, Netflix does remain the biggest name in India, but that could all change now that Disney has entered the fray…

Disney’s secret weapon

It’s no secret that Disney+ has been a massive success, with close to 30 million subscribers in two months, a killer earnings report last week that saw growth all-round, and an all-star lineup of content. However, Netflix can boast all of this and more, but Netflix doesn’t have Star India!

Star India may not be a household name in western society, but it is a big deal in India, and belongs to 20th Century Fox, which now belongs to — you guessed it — Disney!

The media conglomerate has a network of 61 channels that are broadcast in nine different languages and reach nine out of 10 households in India. Star also has the broadcasting rights to the Indian Premier League cricket finals, which drew in more than 400 million viewers last year.

That’s not all: Star India also owns Hotstar, the largest streaming platform in India with more than 300 million monthly active users. Analysts estimate that Hotstar has between 4 million and 5 million VIP subscribers and about 2 million in its Premium tier, which costs $14 per month.

Disney CEO Bob Iger has stated that Disney+ will be capitalizing on this asset in India and plans to rebrand Hotstar’s subscription as Disney+ Hotstar, but no pricing plan is in place yet. Without spending a cent on marketing, Disney already has access to the biggest streaming platform in the second-most populated country on Earth.

It almost seems unfair.

Is there room for two kings?

As the old adage goes, a rising tide lifts all boats, and with streaming, it’s no different. Netflix has already shown growth in its international subscribers despite the release of Disney+, and it does not look to be slowing down on content production.

The streaming industry itself expected to grow at a CAGR of 20.4%, which should make it worth more than $180 billion by 2027, while user penetration is only expected to reach roughly 20% by that time, leaving a lot of room for growth. There are an estimated 4.4 billion internet users around the world. With less than 200 million subscribers between both Disney and Netflix, there are plenty of potential subscriptions to go around in a market that still remains largely untapped.

For now, Netflix remains king, and is likely to stay that way, but who’s to say Disney won’t join it?

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Disney and Netflix. Read our full disclosure policy here.