India is a big growth market: Walt Disney Company chief Bob Chapek

Walt Disney Company chief Bob Chapek said that India is a big growth market. He was speaking at the Goldman Sachs Communacopia + Technology Conference 2022.
“A lot of companies have tried and failed in India and we have actually had a lot of success both on our linear business and in terms of generating subs for Hotstar. So, we certainly don’t take that lightly. It’s a big growth market as you know. A lot of companies have had challenges trying to be successful there. And I have to say I am really proud of our team and what they orchestrated on the cricket rights, because our hope is they come for cricket, but they stay for Disney. And I think what you are going to find is we did a surgical plan to try to get the linear rights, right, through IPL knowing that the market got a little too frothy for us on the digital rights, but then we came back and got the ICC digital rights, which were not as frothy and a much better value for our shareholders and then kind of spun off the excess linear rights, because we already got that from the IPL. So I think it’s a great example of us trying to seek value different ways not to say on, off or yes or no. But what we do, the extent that we go to try to orchestrate a scenario, that’s going to be accretive for our shareholders and enable us to still play the growth game in that particular market. So we are still bullish about India,” he said.
Regarding not renewing the streaming rights to the IPL in India and the Big Ten college football rights, Bob said: “Well, our ultimate filter is shareholder value. If it’s accretive to shareholder value, then we do it. If it’s not, then we don’t do it. Obviously, you have to have critical mass. But with the wealth and the plethora of sports rights that we have, whether it’s professional or college or things like Formula 1 or combat sports, we are very well positioned to have a – be well past the critical mass point and be able to blend that into a most respected and trusted brand and sports promise that we have on ESPN. So, we are nowhere near anywhere where we can’t say no and be pretty darn confident we are in good shape. And that’s where exactly where we want to be. And we are proud of our sports assets that we have got rights to and believe that, that ultimately is the power of ESPN.”
According to him, Disney is way underpriced relative to the value that the company provides. Therefore, he added, Walt Disney owes it to its shareholders to try to get that recognised. “And obviously, we have lots of data, whether it’s what we’ve just announced a few months ago on ESPN and sort of looking at what happened there. It’s our own consumer data in terms of what consumers’ intentions are, our own churn data. And I think suffice it to say that we think we made the right move and we are still in some cases significantly under where our competitors are, which again speaks to that introductory price that we came out at. And so I don’t think if we came out at a more moderate price to start with, people would be looking at where we are at now and say, oh my gosh, you took such a big price increase. It’s only relative to where we started, but I think everyone recognizes that, that’s a tremendous value. And it helped us get to where we are at in terms of those huge sub numbers. I mean it’s hard to believe we have only been at this 3 years and we have gotten to the point where we are at. But that said, I think we’ve got a long way to go still,” he added.
He stressed the importance of live sports for the company.
“The Walt Disney Company adds a lot to ESPN, and ESPN adds a lot into The Walt Disney Company. And you can look at it something as simple as the soft bundle, but you can also look at the tremendous benefits that live sports brings to the company, whether it’s from an advertising standpoint or from an audience standpoint or from a fandom standpoint. And we think that’s very important. We think that The Walt Disney Company is a place where ESPN can be maximized relative to possibly anywhere else – that asset sitting anywhere else. And as such, we’ve been with pretty staunch supporters despite the tremendous market demand for us to sell it or spin it or there is a lot of people that are interested in getting a piece of ESPN, but we like our own hand. We like how it sits. We like our long-term strategic plan. And we’re confident that the best place for ESPN is within The Walt Disney Company,” he added.