On Thursday, Paramount (PARA) introduced it will promote its stake in India’s Viacom18. It follows the same transfer from Disney (DIS), which is merging its India property with Reliance Industries in a three way partnership. Why are these two media giants making the transfer now? Yahoo Finance’s Alexandra Canal explains within the video above.For extra professional perception and the most recent market motion, click on right here to observe this full episode of Yahoo Finance Dwell.Editor’s observe: This text was written by Stephanie Mikulich.Video TranscriptJULIE HYMAN: India’s leisure trade is booming, however US media corporations like Paramount World and Disney are discovering it troublesome to compete as native rivals sit on piles of money whereas monetization efforts within the area stall. Yahoo Finance– Yahoo Finance’s Alexandra Canal. So excited to speak to you about this, Ali. You’ve got been digging into this.ALEXANDRA CANAL: Yeah. So I simply thought it was attention-grabbing that very just lately within the span of two weeks, we have seen two main media corporations pull out of India. And India is an space that we have seen quite a lot of progress in, quite a lot of investments throughout tech. You take a look at an organization like Apple, they’re making quite a lot of investments over there.Nonetheless, the explanation why I believe that is taking place now’s profitability is a giant problem for lots of those corporations. Paramount, clearly, is coping with heavy debt masses. And now that they bought their total 13% stake in Viacom 18 to Reliance Industries, they’re getting $517 million in money. In order that helps them delever their steadiness sheet as M&A rumors are swirling for that firm.On the similar time, it is very arduous to monetize in India. And I believe that is why we noticed Disney retreat somewhat bit from that firm. They will be promoting their Starz enterprise to Reliance. They usually’re actually creating this new three way partnership. So not totally exiting India, however undoubtedly a step again in comparison with what they had been doing earlier than.And Disney, they actually struggled within the nation after they misplaced the rights to stream the Indian Premier League Cricket matches to Reliance. That led to a extreme drop in these Hotstar subscribers. And that led to common income per person declining fairly quickly. So when you may have this mixture the place profitability is struggling, again at residence within the US, each of those corporations are coping with quite a lot of challenges, now might be not the most effective time to be making additional investments in riskier abroad markets.Story continuesThat being stated, although, India has very vital advances when you concentrate on media and leisure. There’s a EY report that the nation’s M&A sector grew 8% in 2023 to achieve $27.9 billion in complete worth. And that is anticipated to proceed to increase because the nation actually grows on this explicit trade. So I believe we’ll see investments. It is simply now may not be the precise time, contemplating all of the challenges.JOSH LIPTON: Yeah, it is attention-grabbing simply given all of the geopolitical rigidity with China. You assume you would be doubling down on India.ALEXANDRA CANAL: Yeah. And like Disney has stated that they need to keep within the nation. However in an earnings name in November, Bob Iger stated on the time that they had been evaluating all of their choices, as a result of there have been areas of the enterprise that we’re struggling not only for Disney however actually throughout the gambit when you concentrate on all of those legacy media corporations which can be in that area. So I do assume it will be an space of focus. I simply assume now might be not the precise time.JOSH LIPTON: All proper, Ali, thanks a lot. Recognize it.