Reliance-Disney merger to reshapes India's media landscape
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Reliance Industries Ltd. (RIL) and The Walt Disney Company have joined forces, merging their digital streaming and television assets in India.
This $8.5-billion media powerhouse is set to dominate the market with at least 100 channels spanning entertainment and sports, along with two digital streaming platforms.
The collaboration also secures exclusive rights to major events like the Indian Premier League (IPL) and Disney productions in India.
The strategic joint venture (JV) between RIL, its broadcast arm Viacom 18, and Disney will integrate TV channels such as Colors, StarPlus, StarGOLD, Star Sports, and Sports18, along with streaming apps JioCinema and Disney+ Hotstar. Viacom18's media operations will be merged into Star India Private Limited within the JV structure, which will be controlled by RIL.
In terms of ownership, RIL will have 16.34%, Viacom18 will own 46.82%, and Disney will hold 36.84%. RIL plans to invest approximately $1.4 billion into the JV for strategic growth.
The deal positions Nita Ambani as the Chairperson and Uday Shankar, Co-founder of Bodhi Tree Systems and former Disney India chief, as the Vice Chairperson.
Despite Disney's initial valuation of its India business at around $10 billion, the merger reflects a decline to approximately $4 billion amid challenges in its linear TV and streaming operations.
The combination of Viacom18 and Star India, boasting a combined FY23 revenue of Rs 25,000 crore, is expected to gain a 40% market share in both linear TV and OTT sectors. Analysts anticipate scrutiny from the Competition Commission of India (CCI) due to the entity's significant market presence, potentially accounting for 80-90% of cricket advertising revenues in India, reported Business Today.
This merger marks Disney's fourth venture in India, aligning with its strategy to conserve cash and diversify its holdings.
The combined licensing rights of over 30,000 Disney content assets strengthen the JV's position against competitors like Netflix and Amazon Prime Video. The deal signifies a significant transformation in India's media and entertainment landscape, echoing the recent shifts in the industry.