Walt Disney APAC President and Star & Disney India chair Uday Shankar said that the media industry had done itself no favours by relying disproportionately on ad revenue over the last few years. “The biggest pain of the industry, for print, TV, and digital, is disproportionate dependence on advertising. Advertising revenue in the 2000s used to be about a billion dollars, and now it is ten billion dollars,” Shankar said at FICCI e-FRAMES 2020’s inaugural session.
“It has helped us grow, but it has been a bit of a distraction. Globally, the industry has grown, through a system where consumers pay,” Shankar pointed out.
Interestingly, Hotstar, which Disney owns, is one of the biggest examples of this phenomenon. In April, Disney disclosed that Hotstar (now renamed Disney+ Hotstar) has 8 million paying subscribers, which is a small fraction of what it claims are over 300 million monthly unique users.
“All of us are guilty of this,” Shankar said. “We decided to be shortsighted and subsidise our products, to create hurdles for smaller challengers. That has become a very big setback for the industry. If the industry has to grow, what has to be fixed is our ability to get people to pay for what they consume. That’s fair, and that’s the only way we can grow.” In an interview with ET Now, Shankar reportedly said that Hotstar was looking to get “tens of millions, if not hundreds of millions” of paying subscribers in the future.
We will be hurt badly by COVID because of our dependence on advertising. For a country of this size, we should be doing a lot better. Our ambitions in the area of content remain very small. We are very happy on television winning the TRP, and as long as we are going ahead over the heads of our competitors we feel very good.
That’s a huge distraction. The content business has gone global, and the opportunity to scale is big. We have the ability to go direct to consumers. This is about newspapers, digital, and all forms of business.
What is worse, is we have been more shortsighted and worked with agencies like regulators and other competitors to create hurdles in the way of unlocking businesses. We have not invested in content and gone global.
Much smaller countries like South Korea, Israel, Italy, Turkey, have a much bigger media business. Their media travels globally, ours doesn’t. This isn’t for a lack of creativity. It’s because of our small ambitions and shortsightedness.
Unless we start becoming a bigger player in the global content consumption space, the business will be suboptimal. For an industry that is growing at this rate, we have to expand and create the talent funnel that we have.
Shankar’s mention of working with government agencies and regulators to create hurdles for businesses is also interesting. Disney (through Star, which it owns) has been among the handful of players that have been pushing for the creation of a Digital Content Complaints Committee for streaming services, an effort that is being encouraged by the Ministry of Information & Broadcasting. Many streaming services oppose the move, and meetings are on to find common ground on the issue.