How Disney took over the mobile streaming wars

This past year, the streaming market exploded. While most people are focused on what will happen in North America — the real battle is happening overseas.

This past year, the streaming market exploded. An area that was recently dominated by Netflix is now filled with hard-hitting competitors like Disney+, Prime Video, Apple TV+, and HBO Max. While most people are focused on what will happen in North America - the real battle is happening overseas.

I’ve spent the last few years travelling to understand how new tech is changing consumer trends, politics, and social norms in emerging countries. In this evolving series focused on India, I look at how the emergence of mobile internet is transforming how Gen Z and Millennials think and act.

Why now, and why India?

India has one of the fastest growing VOD (Video On Demand) markets in the world. With its total value expected to hit $5B by 2023 in a study done by BCG, its attracted the attention of the worlds largest and most aggressive companies.

While globally internet growth is slowing, that’s not the case in India. Internet user numbers grew more than 28 percent in 2016 (mid-year figures) to 355 million users, second only to China. Today, that number has shot up to 639 Million, almost double what it was in 2016.

For historical context, India has a population of 1.34B. But only about 300M of them traditionally been connected to high speed internet (formally known as ‘Tier 1 India’).

In 2016, Reliance industries launch a new telecom company called ‘Jio’ with the goal of connecting the remaining 1 billion users in India to 4G internet. Within the first 18 months Jio made international headlines connecting 160 million people to 4G internet. Today Jio has over 369 Million subscribers and has become the 3rd largest telecom provider in the world in just 3 years and dramatically increasing the number of mobile internet users in India.

For companies like Amazon and Netflix, this unlocked an entirely new market of consumers who started streaming movies and TV shows from their phone for the first time.

Since then, both companies have launched ambitious campaigns in India and managed to capture significant market share (with Netflix at 5% and Prime Video at 10%) but none of them compare to Disney, with a whopping 29% of the rapidly growing market – through a subsidiary that most American’s have never heard of, Hotstar.

As of 2018 in India, 46% of smartphone users have the Hotstar app.

What is Hotstar and how did it grow so rapidly?

Hotstar is a subsidiary of Star India that was launched in 2015. Star India is a media powerhouse with its Headquarters in Mumbai, India. It has a network of 60 channels in eight different languages and reaches over 790 million viewers every month across India (almost twice the entire population of the US).

In 2019, Disney completed a massive acquisition of 21st century fox for 71 Billion. In that acquisition were titles like X-men, The Simpsons, and a controlling stake in Hulu. But crown jewel of this purchase was Star India – the owners of Hotstar, a video streaming service that had made major moves to capture the Indian market after it launched in 2015.

A few years before the acquisition, Star India grabbed the rights to stream the Indian Premier League (IPL) - allowing it to stream the 2015 cricket world cup through its new app Hotstar. In India, cricket is a religion that crosses all areas of identity. Children in rich neighborhoods and poor villages grow up playing it in the alleyways with a ball and a piece of wood. The players on India’s team are known as gods across the country alongside Bollywood superstars. By streaming the IPL matches and the cricket world cup through its platform, Hotstar was able to rapidly grow to 100M monthly active users in 2018 and 300M monthly active viewers by 2019. To give you a sense of scale, 300M users is double the entire subscriber base that Netflix has built over the last 13 years.

Hotstar even took it a step further, adding premium tiers which features international content from HBO like Game of Thrones on top of the 30,000 hours of content in multiple languages that its owner Star India produces every year.

With the aforementioned rise of the internet, by the time I started my interviews in January of 2019, Hotstar was a subscription service used by everyone from McKinsey consultants in Mumbai to the security guards working the night shifts in Chennai. Total domination of the market, now entirely owned and controlled by Disney.

So what happens now?

Disney isn't alone on its quest to dominate India’s video streaming market. With Jeff Bezos and Reed Hastings doubling down on their investments in India, the market has become flooded with ads and incentives for users to try out some of the new streaming services.

Hotstar is also facing competition from JioTV and JioCinema - the media streaming service of Reliance Telecommunications, the telecommunications company that spread the internet across India. But in terms of the overall global streaming wars, it's going to be hard to beat since Disney is just getting started.

Just a few weeks ago, Bob Iger announced that Disney will be loading Disney + content from Marvel to Star Wars onto Hotstar on March 29th and into the hands of 300M monthly active users. With such a hold on the market, it's unlikely that HBO or other new streaming services will try to plan aggressive expansions, allowing Hotstar to be the platform that brings new international hits into the hands of Indians over the next few years.

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