Focussing On India Specifics
The Walt Disney Company is ecstatic about India’s digital growth story. Lately, with Bird, who is responsible for business outside the US, having implemented structures in international markets, the company’s revenues have greatly accelerated in India, China, Europe and Latin America. Last year, Disney’s Dangal grossed over $300 million globally, with $195 million coming from China.
Bird opines, “The Walt Disney Company India came about as a result of organic growth and an acquisition. It accelerated us into the movie business and gave us a base for local creativity for television.”
Riding high on Dangal’s success, Disney is looking to take advantage of the 4G opportunity for the masses in India brought about by telcos such as Reliance Jio. “They went from zero subscribers to 130 million subscribers in one month. Now they are trying to get people to understand to start paying for the service. We need to be careful with our strategies,” says Bird.
Samat who returned to the company after four years in October 2016, is leading the charge in India and has placed high bets on Disney’s core strengths — Hollywood and the consumer product business.
“We started moving from being a purely export business to taking the best of what’s created here in the US and adapting that and also investing heavily in local creative. Each Disney office around the world is run by a local leader, who has a keen understanding of what it takes to reach our goals in that specific market and is empowered to best implement our strategy,” says Bird.
The Spotlight
In April 2016, the company decided to shut down local production. Samat explains why the company took a strategic pause to focus on what it does best. “There are a lot of opportunities in existing areas itself. Interestingly, the growth is pretty strong in all the lines of businesses today. But we have taken a decision to pause the local studio production because that economic model is still not set and the market is pretty volatile. Once we get a better sense of the economic model, we can consider going back in. But right now that is the only thing that we have decided to pause.”
Focussing on its Hollywood business, he elaborates on the growth strategy for its film franchises — Marvel and Lucasfilm. So far in India, close to 35 Marvel movies have released generating over 100 million admissions, according to Disney numbers. However, Star Wars is still niche in the Indian market.
Looking to build a strong affinity with its characters, the movie Spiderman Homecoming attracted 60 brands and seven media partners. “The merchandising business is growing really fast and aggressively, and is driven by the success of the creative output of both television and studio. As Marvel has grown, the growth of merchandising has been commensurate with that. On one side, it is the growth of the brands due to rise of digital media, and on the other, it is how we did merchandising with the characters,” adds Samat.
From The Media Lens
Currently, in the Disney bouquet, there are eight specialty channels such as Disney Channel, Hungama TV, Disney Junior, and Disney XD; two youth networks — Bindass and Bindass PLAY; two movie channels — UTV Action and UTV Movies.
With digital changing the viewing habits of consumers, it is extremely important for media companies now to have digital presence. Bindass launched web series such as ‘The Girl In The City’ and ‘Tide’ to focus on a particular target group — the young millennials.
Samat explains how digital is changing entertainment, and the company needs to strategise for that, “If I take an example of Bindass’ web series, it had millions of views and has become a strong alternative to many other media. We want to be market leaders in the web series space. The entry of the Disney brand was a little late in India and it will take some time to grow.”
Shift in Focus
The company’s consumer product business has witnessed a significant growth in the last couple of years. More than 60 million Disney products and 1 million Disney books are sold in the region annually.
When asked how India is stacking up against others globally, especially China, Bird says, “The strategy couldn’t be more divergent between countries. In China, the media is regulated, particularly for foreign companies. So we can’t build our brand through the Disney Channel. The number of films allowed to be released in China are capped. Only 34 foreign films are allowed into the country every year, and often it’s short notice.”
So, according to him, “The Shanghai Disneyland and our consumer products business give us enormous reach in China. We started building stories over 12 years ago, in anticipation of building the Shanghai Disney Resort. We started telling our story via retail and licensing so consumers could understand the notion of our ‘princesses’. So when they experience Shanghai Disneyland, they could understand the brand, the characters and the products, in depth,” says Bird.
As the company restructures its business in India, one key business that brings major revenue to the company — its theme parks — is yet to foray in India. Can India have its own Disney theme parks in the future? Samat dodges the possibility and intends to focus on the current business at the moment.
“India is the most fierce country in the world in terms of media and entertainment with opportunities aplenty. So first, we have to establish ourselves in media, before we look at newer opportunities. India is priority for the Walt Disney Company right now. Whatever is required and is appropriate to grow the business here, we will do. Given the number of brands we have right now, we see a lot of opportunity in organic growth. But the strategy is very clear, to create good content either in Hollywood or here based on the insights of consumers; use digital appropriately; and make sure our partners grow with us,” concludes Samat.
