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Photograph: (staff)
Mukesh Ambani is determined to demonstrate that Indian consumers are willing to pay for online video content. Late last year, Ambani, who holds the title of Asia's wealthiest individual, finalised a partnership with Disney to establish the largest entertainment enterprise in India. He is the principal shareholder through his conglomerate, Reliance, which spans energy, retail and telecommunications.
JioStar, with a valuation of $8.5 billion, boasts the largest array of television networks in India, along with the country's most popular subscription-based streaming platform, JioHotstar. Uday Shankar, a prominent figure in India's media landscape and investment sector, is responsible for the daily management of the business.
According to Bloomberg, JioHotstar announced that it has exceeded 100 million subscribers, marking it as the first streaming service in India to achieve this significant milestone. This achievement is particularly noteworthy in a market where convincing consumers to pay for entertainment has historically been challenging. Ambani's success can be largely attributed to the popularity of cricket, especially the Indian Premier League.
“This new combination of JioHotstar is trying to change TV,” said Vivek Couto, owner of the consulting firm Media Partners Asia. “You have this big industrial juggernaut and a maverick entrepreneur. What does success look like for this business?”
India's entertainment media industry
International media firms have long been captivated by the potential of India, a nation with a population of 1.4 billion. Capturing even a mere 5% of this vast market could yield a profitable venture. Major players like Paramount, Disney and Time Warner entered the scene with high aspirations but faced significant challenges. They made poor hiring decisions, lacked patience and failed to appreciate the market's diversity.
Rupert Murdoch is often credited with successfully navigating the Indian landscape, although many attribute this achievement to his son James, who collaborated closely with Uday Shankar, now a co-owner and vice chairman of JioStar. The influx of streaming services began nearly a decade ago, coinciding with the rise of internet accessibility driven by Ambani’s Jio, which offered mobile plans at prices comparable to a cup of coffee in the United States.
In 2018, shortly after Netflix's entry into India, co-founder Reed Hastings expressed optimism about reaching 100 million subscribers in the country. He reinforced this commitment a year later by investing hundreds of millions in localised content. However, Netflix faced challenges in attracting a substantial subscriber base, as its pricing was perceived as high and competition from other services was intense.
Nevertheless, there are indications that the market is beginning to improve, particularly among the affluent demographic. OTT and streaming platform Netflix's subscriber count has reportedly risen to approximately 15 million, marking a significant increase over the past few years. Industry observers agree that the company is starting to establish a stronger presence through a combination of licensed films and original local productions. Additionally, the number of individuals subscribing to music services has tripled since 2020.
Online subscription growth
These figures remain relatively modest. Netflix enjoys popularity among affluent Indians who are keen to access more provocative content that is unavailable on local television. A mere fraction of Spotify and YouTube users opt for the premium subscriptions of these platforms.
In contrast, JioHotstar has significantly more ambitious goals. The platform aims to rival Netflix in the premium segment while also competing with YouTube in the budget-friendly category. It boasts an extensive library of local content, along with licensed offerings from major studios such as Disney, HBO, NBCUniversal and Paramount, in addition to short dramas. Users can access the service for free up to a certain limit, after which a subscription fee is required to continue viewing.
The typical JioHotstar subscriber spends less than $1 per month, which positions advertising as a crucial element of the company's profitability strategy. According to Media Partners Asia, the market for streaming video advertisements is three times larger than that of subscription services. Platforms like YouTube, Facebook and Instagram collectively attract hundreds of millions of users in India, with YouTube being the largest market in terms of user base.
Are Indian users misers?
Shankar has strategically positioned cricket, a sport immensely popular in India, at the core of his business approach. The company is investing over $1 billion annually to secure the rights for the two-month Indian Premier League tournament, encompassing both television and streaming platforms.
According to Couto's estimates, JioHotstar must attract between 200 million and 300 million subscribers to make this investment viable. The financial burden is so significant that the company cannot rely solely on revenue from the matches. Therefore, management must also engage a substantial audience that will remain for broader entertainment offerings.
The expansion of streaming services is crucial in a market facing challenges similar to those encountered globally. India's pay-TV sector is declining and the film industry is experiencing turmoil. Overall, the entertainment sector grew by only 3% last year, as reported by Ernst & Young, which is slower than the growth rate of the country's economy.
“The economy appears to be growing, but it’s not yet translating into the ad boom everyone was expecting,” Couto said.
Bollywood, which refers to the Hindi film industry, appears to have disconnected from its audience, ceding a significant portion of its cultural influence to filmmakers from southern India. Many prominent producers are contemplating selling their companies to external investors, as evidenced by Dharma Productions' decision to divest a 50% stake to a pharmaceutical magnate.
When engaging with an average Indian screenwriter or producer, one may find their sentiments echoing those of their counterparts in the United States or South Korea. Streaming platforms are now scaling back after investing billions in the pursuit of subscribers. This trend of consolidation has resulted in Netflix, Amazon and JioStar emerging as the primary purchasers of most high-quality programming. According to Media Partners Asia, the number of locally produced original series has declined by approximately 30% from its peak in 2021.
Output slumps
Executives in India are exhibiting a more positive outlook compared to their counterparts in the United States. Over the past decade, India's gross domestic product (GDP) has experienced a remarkable doubling, positioning the country on the verge of potentially surpassing Japan and Germany to become the world's third-largest economy. Despite the GDP per capita remaining relatively modest at around $2,500, the emergence of a burgeoning middle class has significantly invigorated the live entertainment sector, leading to increased demand and investment in this area.
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In the realm of global television, the Netflix miniseries "Adolescence," a four-part production from the United Kingdom, currently holds the title of the most-watched series worldwide. This show has outperformed new releases from esteemed creators such as Shonda Rhimes, Robert De Niro and Mindy Kaling, underscoring the inherent unpredictability of success in the entertainment industry. The phenomenon illustrates how audience preferences can shift dramatically, often favoring unexpected content over established names and brands.
While Hollywood studios tend to play it safe by hiring established filmmakers and stars for their projects, Netflix has unexpectedly discovered another culture-shaping success originating from lesser-known directors. Notably, the director's film, Boiling Point, is commendable in its own right.
Netflix's remarkable ability lies in transforming shows and films with initially limited audiences into online sensations. This phenomenon is evident in both new releases, such as Adolescence and Baby Reindeer and older titles from its library. For instance, according to Nielsen's data, movies like Focus, Jack Reacher: Never Go Back and The Flash attracted only a few million viewers during their initial months before being added to Netflix. However, their popularity surged significantly in the three months following their debut on the platform.
Netflix effect
Television reruns have taken on a new significance, particularly with the remarkable success of "Suits" on Netflix. The surge in viewership is astonishing; audiences devoted more time to watching "Suits" within just six months on the streaming platform than during its entire eight-year television broadcast.
In the realm of cable television, networks and film studios recognised the potential influence of Netflix over a decade ago, prompting them to begin licensing their popular shows to the streaming service. This strategy ultimately allowed Netflix to capture a significant portion of their audience. In response, many networks and studios are now revisiting licensing agreements, hoping that visibility on Netflix will yield long-term benefits for their content.
Currently, the top album in the United States is Playboi Carti's "Music," which has maintained its position at the number one spot for two consecutive weeks.
In a significant development, private equity powerhouse Silver Lake Management has finalised its acquisition of Endeavor, marking the end of a highly successful partnership in contemporary media. Ari Emanuel and Patrick Whitesell transformed Endeavor from a small talent agency into a vast media enterprise by acquiring numerous companies, including the William Morris Agency, sports powerhouse IMG and the UFC. Despite skepticism regarding the acquisition costs, Silver Lake continued to invest in its vision. Emanuel, known for his tenacious negotiation style, served as the inspiration for the character Ari Gold in the television series "Entourage," while Whitesell, the star-studded agent, balanced Emanuel's more aggressive approach.
Investors struggled to grasp the cohesive strategy behind Endeavor, leading to the decision to separate its combat sports division into TKO and ultimately discontinue its public trading venture. The remnants of Endeavor now primarily consist of the agency known as WME.
Throughout this transition, a rift developed between Emanuel and Whitesell. Emanuel took charge, appointing former ESPN and Six Flags executive Mark Shapiro as his new right-hand man, while Whitesell remained as the chairman of Endeavor's board and maintained a friendship with Egon Durban of Silver Lake. With their partnership officially concluded, Whitesell will concentrate on investing Silver Lake's capital in sports and media ventures, such as Peyton Manning's Omaha Productions, while continuing to provide counsel to clients like Ben Affleck and Matt Damon. Emanuel will retain his roles as chairman of WME and CEO of TKO, and he has successfully raised significant funds to acquire live event businesses, some of which were previously part of Endeavor. Although the ambitious experiment of operating a publicly traded talent agency did not succeed as intended, both partners emerged financially prosperous from the endeavor.
In other news, a video game company backed by Saudi Arabia is currently engaged in a billion-dollar acquisition spree, with Cecilia D’Anastasio interviewing its co-CEO to delve into the underlying strategy. Additionally, Ticketmaster may have violated legal regulations in its sale of Oasis tickets. The Sundance Film Festival is relocating to Boulder, Colorado, after four decades in Utah. According to Magna Global, advertising sales growth is expected to decelerate in 2025 due to economic uncertainties, while sectors like retail search (notably Amazon), streaming and social media are projected to expand, contrasting with the decline of linear TV, local TV and radio. Furthermore, Warner Bros. has decided to cancel its plans for expanding Hogwarts Legacy, one of its most successful video games to date.