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Walt Disney CEO commits to Indian Market despite challenges

In an earnings call, Bob Iger revealed plans to strengthen company’s India presence as the Disney+ Hotstar subscribers decreased 7% in Q4FY23.

In the midst of widespread speculations regarding Walt Disney's India biz, CEO Bob Iger has underscored the company's commitment to the Indian market. During a recent earnings call, Iger was queried about the possibility of Disney exiting the Indian market, characterised by some as a "consistent money loser." In response, the CEO elucidated that, notably, their linear business in India not only fares well but also registers profitability, despite acknowledged challenges in certain facets of their operations.

He said, “In India, our linear business actually does quite well. Yes, it's making money. But we know that other parts of that business are challenged for us and for others. But we're considering our options there. We have an opportunity to strengthen our hand. It is now maybe the most populous country in the world and we'd like to stay in that market. But we're also looking to see whether we can strengthen our hand obviously, improve the bottom line. In terms of advertising, we are actually finding that linear is a little bit stronger than we had expected it would be. It's not back as much as we would like.”

For the fourth quarter of fiscal year 2023, Disney+ Hotstar registered the paid subscriber count of 37.6 million, down 7% from 40.4 million from the previous quarter ending July 1, 2023.

The fiscal quarter ending September 30, 2023, witnessed Walt Disney report a revenue of $21.24 billion, marking an upturn from the $20.1 billion recorded in the corresponding quarter of the previous year. Furthermore, the company's annual revenue demonstrated an ascent of 7% from 2022 to 2023.

In the earnings call, Walt Disney spotlighted their total operating income, which tallied at $2.9 billion, a noteworthy year-on-year increment of $1.4 billion from the prior fiscal quarter. The conglomerate's total entertainment revenue, encompassing linear networks, direct-to-consumer services, and content sales/licensing, posted a 2% elevation, progressing from $9.2 billion in Q4 2022 to $9.5 billion in Q4 2023.

Disney's earnings outperformed expectations, buoyed by profits from ESPN+ and continued growth in their theme park division. Nonetheless, a dip in ad revenue weighed on the top line, particularly attributed to Disney's ABC Network and other owned TV stations, which witnessed diminished political advertising revenue during the quarter. CEO Bob Iger had previously suggested the possibility of divesting the company's TV assets.

The earnings report revealed a 9% contraction in revenue from linear networks within the entertainment segment during Q4 FY23.

The revenue derived from Star India in the sports segment plummeted from $116 million in the equivalent quarter of the preceding year to $92 million in Q4 FY23. The operating income from Star India mirrored this decline, descending by 29%, from $17 million to $12 million within the same timeframe.

The overall revenue from the sports segment maintained stability at $3.9 billion in both Q4 FY23 and Q4 FY22.

In parallel, Disney celebrated the addition of 7 million new core Disney+ subscribers during the previous quarter, increasing the total user count to 150.2 million, encompassing Hotstar. The streaming sector also narrowed its losses relative to the preceding year.

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