Disney+ Hotstar and JioCinema are valued higher than their parent companies' traditional TV operations.

The valuation showed that digital businesses are valued significantly higher than traditional TV due to their wider reach and revenue potential.

Disney+ Hotstar and JioCinema's valuations have surpassed those of their parent companies' traditional TV businesses. 

According to documents seen by ET, EY valued Viacom18 at ₹33,000 crore, while BDO valued Star India at ₹26,000 crore. This was part of a valuation process before the merger deal between Reliance Industries (RIL) and Disney was finalized.

RIL and Disney signed a deal on February 28 to merge Star India with Viacom18, creating a new entity valued at ₹70,352 crore. This includes a ₹11,500 crore investment from RIL. 

BDO valued Star India’s entertainment business at ₹15,999 crore based on a revenue multiple of 1.75 times, and its digital business (Disney+ Hotstar) at ₹16,040 crore based on a higher revenue multiple of 3.81 times. The valuation showed that digital businesses are valued significantly higher than traditional TV due to their wider reach and revenue potential.

For Viacom18, BDO estimated an enterprise value of ₹15,622 crore based on a revenue multiple of 2.6 times. After adjustments, Viacom18’s equity value was ₹32,937 crore. In April 2023, Reliance and Bodhi Tree Systems invested ₹15,145 crore in Viacom18.

The merger plan involves transferring JioCinema and other media operations to a new subsidiary, Digital18, which will then transfer these assets to Star India. 

EY's valuation suggested that Star India would be worth ₹32,955 crore and Viacom18 ₹25,926 crore, leading to a merged entity where RIL will hold a 56% stake, Disney 37%, and Bodhi Tree Systems 7%.