The cornerstone of Disney’s Indian venture, the Hotstar streaming service, has experienced a resurgence thanks to the ICC Cricket World Cup. This however, belies the challenges the company faces on other fronts in India. The Star Sports business, integral to Disney’s strategy, incurred a significant operating loss, raising questions about the sustainability of its current business. Disney’s Star Sports business clocked a $444 million operating loss in the nine months to July 1, exceeding the previous fiscal year’s loss of $237 million.

The acquisition of 21st Century Fox, including Star India, marked Disney’s ambitious foray into the Indian subcontinent in 2019. But the subsequent loss of streaming rights to JioCinema and Star Sports’ substantial losses underscore the competitive hurdles Disney must navigate.

Disney Star operates more than 70 multilingual TV channels in India, besides Disney+ Hotstar. The looming question of whether it will stay the course in India or opt for a strategic alliance with a local player like Jio remains unanswered. Will it be a full acquisition, or a strategic partnership that preserves Disney’s foothold while mitigating risks. As discussions with potential stakeholders such as Reliance, Adani Group and Sun TV Network unfold, Disney will have to decide the fate of its Indian assets.

Will Jio choose a partial acquisition, allowing Disney to maintain a presence, or will it pursue a complete takeover to consolidate its position in the Indian media landscape? The prospect of securing exclusive rights at a favourable cost could drive Jio towards a more substantial investment, reshaping the dynamics of the sector. Its potential interest in acquiring Disney’s India assets aligns with its ambitious growth strategy. With a valuation of between $7 billion and $8 billion, Disney’s portfolio, including Disney+ Hotstar and Star India, represents a veritable treasure trove.

Jio is already a formidable player with Viacom18 under its belt, and acquiring Disney would fortify its dominance. By assimilating a major competitor with deep pockets, it would not only expand its content library but also eliminate a potential rival and give Jio the power to shape the industry’s future.

For Disney, the Indian market represents more than just a balance-sheet entry. With the fastest-growing major economy globally and a population surpassing 1.4 billion, India is a crucial battleground for supremacy in the entertainment industry. As Disney contemplates its future in India, it grapples with a delicate balance between profitability and market presence.

Can Disney afford to vacate the Indian market, forfeiting its significant studio and TV business, especially when streaming services are gaining unprecedented traction? The potential impact on Disney’s global standing and the evolving narrative of India’s media landscape hangs in the balance.

Disney faces the challenge of securing its bottom line while aligning itself with one of the world’s most dynamic markets. So, will India be the happiest place on Earth for Disney?

Dr. Srinath Sridharan is a policy researcher and corporate advisor.