The Walt Disney Co. recorded $2 billion in charges due to goodwill impairments related to the merger of its India unit with Viacom18, an arm of Reliance Industries Ltd. The US media behemoth said the impairments in the January–March quarter are related to Star India and entertainment linear networks.
In February, Reliance announced that it would merge its television and streaming business with Walt Disney's India unit to create the country's largest media company, valued at Rs 70,352 crore. The two companies signed a binding, definitive agreement to form a joint venture that will combine the digital streaming and television assets of Viacom18 and Star India.
In the same quarter last year, Disney recorded charges of $152 million, primarily for severance.
The company's local streaming service Disney+ Hotstar's paid subscriber count declined 6% quarter-on-quarter to 36 million in the March quarter. Average monthly revenue per paid subscriber fell 45% sequentially to $0.70 due to lower advertising income.
As compared to this, Disney+ added more than 6 million customers during the quarter globally, and saw a rise in average revenue per user. The media giant offers a lower-priced plan in India that it counts separately.
Disney expects softer entertainment direct-to-consumer business in the third quarter, driven by Disney+ Hotstar.
Revenue from sports business Star India fell 17% year-on-year to $105 million, even as its operating loss declined due to lower programming and production costs, attributable to the non-renewal of Board of Control for Cricket in India rights, and partially offset by an increase in costs for Indian Premier League matches due to more matches aired in the current quarter as compared with the same quarter last year.
In June 2022, BCCI sold the IPL broadcasting rights for Rs 48,390 crore for the 2023-27 cycle. Disney Star won India TV rights for a bid of Rs 23,575 crore and Viacom18 (which owns JioCinema app) bagged digital rights for Rs 23,758 crore.
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