Is The Walt Disney Company looking at writing off Fox Star, its film studio business in India? Senior industry sources, many of them former Disney-Star employees, confirm that the American media giant known for its iconic movie franchises such as Star Wars, The Incredibles and The Lion King, isn't interested in the film business in India.
The Walt Disney Company, says a former employee, has taken a call not to greenlight any new films in India, as it doesn't see value in the business. "The studio business in India has too many stakeholders and often doesn't allow the studio to own the IP, and Disney's business model globally is driven by IPs. Fox Star will either be written off or reduced to a mere distribution company," he explains. The media giant is known to have asked a large number of Fox Star employees to resign. "They were asked to resign on the same day when Uday Shankar's resignation was announced," confirms yet another former Disney-Star employee.
The Disney-Star management, however, rejects the contention, saying the news of writing off the studio business is not true: "Fox Star Studios is one of the country's largest films studios with production and distribution business for Local and Hollywood movies. Our Studios business is a significant asset for Star India and after the merger with The Walt Disney Company, it has become even stronger. Recently, the studios released three movies from the Fox Star Studios portfolio directly to our digital platform and we are now excited to deliver the most anticipated movie - Laxmmi Bomb, which is expected to be the biggest blockbuster in the direct to digital movie space. In the past six months, we have seen disruption in the movie production and distribution landscape, which has led to changes in the release schedules. Furthermore, the team is focused on making the 3-part movie Brahmastra, the biggest movie for Indian audiences. We remain excited about the prospects of our studios business under Bikram Duggal's leadership," says a response by the company to BusinessToday.In query.
Fox Star does have big ticket releases such as Laxxmi Bomb and Bramhastra coming up, but both the films were commissioned last fiscal.
Disney, according to industry sources, had decided to exit the film business right from the time its merger with Star was announced in 2018 (Star India was part of 21st Century Fox, which Disney bought for $71 billion). This will not be the first time that the media giant would write off a studio business in India. In 2016, it wrote off its investment in Ronnie Screwvala's UTV, which it had bought for Rs 2,000 crore. "Disney has found the studio business unviable in India, hence, it wrote off the UTV investment and the same sentiment continues for Fox Star as well. Most Fox Star projects aren't profitable," says a former Disney India employee. He says that the studio business didn't release its new slate this year. "They may blame COVID for not releasing their new slate, but they had decided not to, last year itself. That's the reason their CEO, Vijay Singh resigned in March this year."
"Fox has always believed in taking big bets whereas Disney has always stayed true to its brand and its profit and loss statements. I am not surprised that it is looking at writing off its studio business in India yet again," says a senior media professional. He says that over 95 per cent of films in India don't make money and this trend is surely not encouraging for Disney to invest in the Indian movie business.
The media network's strategy of releasing films on Hotstar has also not paid off. "It has not added to its premium subscriber base. Hotstar minus IPL is a distant number three," says the former CEO of a media company. He claims that a number of expensive shows that were planned to be released on Hotstar have been put on hold.
Disney-Star in the last few months is known to have laid off around 400 people out of its 2,800-strong workforce. The latest exit is that of Gautam Thakur, CEO, Star Sports.