Disney's $10 mn reason to end HBO deal

Disney Star, the Indian unit of the Walt Disney Co., has decided against extending its longstanding content deal with Warner Bros. Discovery, resulting in the removal of 144 HBO Originals, including popular series like Game of Thrones, House of the Dragons, The Last of Us, and Succession, from Disney+Hotstar on 31 March.

- Gaurav Laghate

 

The two entertainment giants’ inability to agree on the value of the content was the primary hurdle to reaching a deal despite several rounds of negotiations, three people familiar with the development said, requesting anonymity. The point of contention was HBO’s $10 million a year asking price for a five-year deal, with Disney+Hotstar reportedly deeming it to offer insufficient value.

In December 2015, Star India (later acquired by the Walt Disney Co. as part of its acquisition of Rupert Murdoch-owned Fox’s entertainment assets) entered into a programming deal with the then Time Warner-owned HBO (now owned by Warner Bros. Discovery) for exclusive rights of the HBO content. The deal was later renewed for five years for $10 million a year till 31 March 2023.

“There were three rounds of talks in the last six months, where Warner Bros. Discovery officials told they were keen on continuing with Disney+Hotstar as the preferred destination for HBO Originals. They also informed Disney Star that while there are other OTT players, who were keen on streaming HBO content, they would rather continue their longstanding association," a person with direct knowledge of the development said.

However, in line with Disney’s plan to “enhance profitability" under CEO Bob Iger, the company decided against renewing the deal.