Reliance and Disney have announced a strategic joint venture to merge their media businesses in India. They are set to dominate India’s media business with 120 TV channels and 2 streaming platforms. Together, they’ll control 75-80 percent of the Indian sports industry on both TV and digital platforms. Let us read the complete details of the Reliance and Disney Deal.
- Reliance and Disney sign $8.5 Billion Deal.
- Control of 75-80% of the Indian sports market across linear TV and digital platforms.
- Valuation: Star India at Rs 28,000 crore and Viacom18 at Rs 32,000 crore.
- Merger announced by RIL subsidiary Viacom18 and Disney’s Star India.
- Monopoly in the Indian sports industry’s properties, including IPL, is expected to lead to higher ad revenues.
Merger Announcement and Viewership Share
The merger announcement came from RIL subsidiary Viacom18 and Disney’s Star India on February 28.
According to the Broadcast Audience Research Council (BARC), Disney Star and Reliance have a 40 percent viewership share in the top 10 channels as of 2023.
Expansive Channel Offerings
The Reliance and Disney deal merger will bring together Indian media assets. This means bringing popular cricket properties like the Indian Premier League (IPL) and shows such as Anupamaa under one roof.
- Viewers will get access to over 70 TV channels from Star India and 38 from Viacom18.
- This shall cover 8 languages.
- It will include channels like Colors, Star Plus, and Star Gold.
- Sports channels such as Star Sports and Sports18.
Market Share and Projection
Analysts estimate that the two companies will have a 40 percent share of the TV advertisement market. This will be followed by a 44 percent share in subscriptions.
As a result of Reliance and Disney Deal, their total TV market share will reach 42 percent by FY23.
Impact on Industry Dynamics
Experts compare the market dynamics to the telecom sector, where a few big players dominate while smaller ones struggle.
Post-merger, other broadcasters may find it challenging to compete in terms of ad revenue and viewership share.
Dominance in Sports Broadcasting
Reliance and Disney’s dominance in sports, especially cricket, could lead to higher ad revenues.
They hold rights to major sporting events like IPL, ICC tournaments, Wimbledon, and more, controlling 75-80 percent of India’s sports market.
Boost in Ad Revenue
The merger is expected to boost ad revenues, particularly from IPL advertising, which generated around Rs 4,700 crore in ad revenue during the 2023 season. With exclusive IPL rights, the merged entity could see increased ad rates and bundled advertisement revenues.
Structural Disruption in the Industry
Overall, Reliance and Disney’s mega-merger is seen as a structural disruption in India’s media and entertainment industry. While the linear TV segment grows modestly, the sports genre is growing faster, and the combined entity stands to benefit from this trend.
The media and entertainment market in India is expected to grow at a CAGR of 8.2 percent from 2022 to 2025.
Source– moneycontrol.com, bloomberg.com
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