The Walt Disney Company’s mammoth takeover of most businesses under Twentieth Century Fox not just makes it a giant unlike anything Hollywood has ever seen, it also provides Disney a massive push in the India market through Star India which operates 69 television channels in the country with a massive viewership of 720 million per month.

And while expanding in terms of television reach – which will be immense in the second-largest subscription TV market in Asia – may not be in line with Disney’s big bet on online as the future of viewing, it is still the one of the fiercest counter attacks by a traditional media company against tech giants that have made an aggressive push into the entertainment business.

The Walt Disney Company said Thursday that it had reached a deal to buy most of 21st Century Fox, the empire controlled by Rupert Murdoch, in an all-stock transaction valued at roughly $52.4 billion.

Mammoth deal

The deal will see Disney acquire 21st Century Fox, including the Twentieth Century Fox Film and Television studios, along with cable and international TV businesses.

Also Read: Disney buying large part of 21st Century Fox in $52.4 billion deal

Critically acclaimed film production businesses, including Twentieth Century Fox, Fox Searchlight Pictures and Fox 2000, which are the homes of Avatar, X-Men, Fantastic Four and Deadpool, as well as its storied television creative units, Twentieth Century Fox Television, FX Productions and Fox21, which have brought The Americans, This Is Us, Modern Family, The Simpsons and other hit TV series to viewers across the globe, will also shift hands.

Disney will also acquire FX Networks, National Geographic Partners, Fox Sports Regional Networks, Fox Networks Group International, Star India and Fox’s interests in Hulu, Sky plc, Tata Sky and Endemol Shine Group.

Not on the deal are Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network which 21st Century Fox which will be separated to a newly listed company that will be spun off to its shareholders.

Disney in India

The move, subject to regulatory approvals, is Disney’s acknowledgement that the future of movie and television viewing is online.

Disney would do well to hope that its India operations will play a key role in its revival. This expansion is crucial for Disney because its largest U.S. network, ESPN, has been losing subscribers as audiences migrate from traditional television to digital viewing.

Star India, on the other hand, is expected to earn $500 million before interest, taxes, depreciation, and amortization in fiscal 2018, rising to $1 billion in 2020, Fox claimed.

Crucially, India contributed majorly to the 10 per cent international ad revenue jump Fox saw in the first quarter this fiscal against a lackluster 3 per cent growth Disney recorded in the United States.

The acquisition will also provide Disney much-needed muscle for an ambitious plan to introduce two streaming services by 2019. With this move, Disney will take on the likes of Apple, Netflix, Amazon, Google and Facebook.

Netflix Inc, for instance, has been offering its streaming service in India for nearly two years now, while Inc’s Prime Video has been courting customers here for one year.

The Sports Edge

For Disney, Star India’s online platform Hotstar could prove as the apt counter given its rise on the back of online cricket broadcast. In September, Star paid $2.55 billion for broadcast and digital rights of the Indian Premier League cricket tournament, beating Facebook which also bid.

Moreover, with its vast stash of films and television shows, Disney is bound to occupy significant space in the Indian market. With Star India under its belt, there are options for Disney to push content in different languages in India.

India represents the second-largest subscription TV market in Asia, with 154 million households in 2016, according to consultancy PricewaterhouseCoopers, which projected that number will grow to 167 million in 2021.

Mobile video traffic, meanwhile, is booming. KPMG expects it will grow at a compound annual growth rate of 68 percent between 2016 and 2021.

Bollywood Too

The deal could also provide Disney a big boost to its film business in India, where the vast majority of movies are local Bollywood releases.

Disney had produced Bollywood films through its Indian film studio, UTV, but recently has focused instead of promoting its global English-language blockbusters in the country.

With the acquisition of Star, Disney may decide to return to local-language film production through UTV for distribution on TV or streaming.

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