Is Disney finding India’s Hotstar too hot to handle?

In the 1934 animated Disney classic The Big Bad Wolf, a pig warns Little Red Riding Hood, “Better to be safe than sorry. Shortcuts are not always good.”

Over eight decades later, the pig’s advice may come in handy for Disney.

Photo credit: Anthony Quintano (CC2.0)

The iconic US media firm took control of Hotstar as part of its US$71 billion purchase of 21st Century Fox in March 2019. But a year later, clashes between the companies’ executives on everything from content and strategy to culture are getting in the way of Disney’s vision for a “transformative era”, several people tell Tech in Asia. These struggles are also putting profitability at risk, they say.

Both companies did not respond to requests for comment.

Apart from creating a content production powerhouse, the deal gives Disney access to multiple distribution channels across the globe, such as over-the-top (OTT) streaming service Hotstar. A subsidiary of Fox’s Star India, Hotstar brings in millions of viewers from the world’s second-most populous country. Its content programming and choices, however, leave a lot to be desired from Disney’s perspective, the sources point out.

Hotstar still features risque shows to keep up with competitors like Voot, which streams Naagin, a popular fantasy thriller about shape shifting serpent women. The show’s full-bosomed lead star wears a bustier that’s a size small for her frame.

Screenshot of a Hotstar webpage / Source: Hotstar

“Disney won’t be caught dead with that image,” says a former senior executive at Hotstar, referring to how the empire that Mickey Mouse built zealously protects its family-friendly reputation. As such, Hotstar is now addressing some of these issues.

Though Disney is known as a process-oriented company, Hotstar has stuck to the aggressive and play-as-you-go culture that it inherited from Star India, the sources observe. For example, Disney is known to commission market and audience studies, do previews, and check feedback before investing and going ahead with series or movies.

In comparison, initiatives at Hotstar are driven by its senior leadership’s gut feel, according to sources Tech in Asia spoke to. Rollouts are often done ad hoc, and strategy pivots are common when things go awry. The company culture is particularly fraught because millions have been invested and time is running out due to intense competition, they add.

Hotstar dominates India’s crowded video-streaming market, thanks to its lead over rivals. That’s despite a drop in downloads: The Indian Premier League (IPL), a money-spinning cricket juggernaut with a fanatical following in the country, has been postponed indefinitely because of Covid-19.

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