Winning Bizness Desk
Mumbai. The Indian government has approved the license transfer of non-news and current affairs television channels from Viacom18 Media Pvt. Ltd. to Star India Pvt. Ltd., clearing a major regulatory hurdle for the highly anticipated merger between Reliance and Disney. This approval follows the guidelines set by the Competition Commission of India (CCI), marking a key step in the creation of India's largest television and digital streaming company. Announced on February 28, 2024, the strategic joint venture between Reliance Industries and Disney is set to combine their entertainment brands in India, bringing together Viacom18, a subsidiary of Reliance, and Disney’s Indian arm, Star India. This merger will result in a media giant boasting 120 television channels and two major OTT platforms. The combined entity will have access to an audience of 750 million viewers across India.
Why the Reliance-Disney Merger?
Walt Disney CEO Bob Iger explained that the merger is essential to stay competitive in the rapidly evolving entertainment landscape. With fierce market competition, the merger will help create a powerhouse that dominates the Indian market. The new company will have a vast subscriber base, combining Disney Hotstar's 3.6 crore paying users with Reliance’s 1.5 crore subscribers, totaling 5.1 crore. For Disney, the partnership with Reliance provides an opportunity to expand its business and reduce financial risks. For Reliance, the merger strengthens its foothold in the Indian entertainment industry, valued at $28 billion (approx. ₹2.3 lakh crore). The joint venture will also position the company to compete with global players like Sony and Netflix.
Impact on the Advertising Market
The merger will result in the combined entity holding a 40% share of India’s television and streaming advertising market. A key advantage of the merger is its monopoly over cricket advertising revenue, alongside broadcasting rights for other major events such as Wimbledon, MotoGP, and the English Premier League. With increased competition from global streaming giants like Netflix and Amazon, the new Reliance-Disney entity may introduce cheaper subscription plans to expand its user base. This could benefit consumers, who will have access to a wider range of content from both Disney and Reliance’s vast entertainment libraries.
Details of the Deal
The merger is valued at $8.5 billion (approximately ₹71,000 crore), with Reliance holding a 63.16% stake in the new entity, while Disney will own 36.84%. Neeta Ambani is set to serve as the chairperson of the newly formed company. The merger is expected to be finalized within the next six months. Once completed, the new entity will dominate the Indian broadcasting market, particularly in cricket advertising, making it the undisputed leader in the entertainment sector. The Reliance-Disney merger promises to reshape India’s media landscape, giving both companies a formidable presence in the highly competitive market.
