 "Disney, Reliance")
The suspense is palpable. On August 28, the Competition Commission of India (CCI) issued a press release approving the “proposed combination” of Reliance Industries (RIL) and Bodhi Tree Systems-owned Viacom 18 Media and The Walt Disney Company’s Star India. The very next day, on August 29, at RIL’s Annual General Meeting, Chairman and Managing Director Mukesh Ambani welcomed Disney to the Reliance family. The press release, to which reams of coverage have been devoted, said, “The Commission approved the proposed combination subject to the compliance of voluntary modifications. Detailed order of the Commission will follow.”
As of October 7, as this column is filed, the detailed order has yet to be released. An e-mail sent to the CCI chairman and two other senior members mid-September has not elicited a response, as have attempts to reach out via X. Without the detailed order, it is difficult to guess the conditions of the merger.
Does it matter? Of the last four media deals the CCI approved, three have come to fruition — PVR Cinemas-DT (2016), Jio-Den (2019), DishTV-Videocon d2h (2017). They were all, however, in the distribution domain. The one deal in the broadcasting/OTT domain — Sony-Zee (2022) — fell apart acrimoniously. The question, then, is, what are the chances of this merger making it to the altar and beyond? Pretty good, given that the $120 billion RIL is keen on bulking up its media business, and the $89 billion Walt Disney Company is looking to jettison its India arm. Unlike Sony-Zee, their motives are well-aligned.
The detailed order is of interest because of the deal’s potential impact. The merger, announced in February this year, will create India’s largest media company, with a combined revenue of Rs 23,000 crore in the financial year ending 2024. Together, it would have 110 linear TV channels, including Star Plus and Colors, and a leading 32 per cent share of all television viewership on the back of shows such as Bigg Boss and Anupama. That is a hold over 285 million of India’s 890 million TV viewers, with large slices in Hindi, Marathi, Telugu and Bengali-speaking markets.
If you combine their OTT brands — Voot/JioCinema/Hotstar/Jio TV — together they attracted an unduplicated 184 million unique visitors in June 2024, according to Comscore data. That is a little under half the reach of India’s largest OTT — YouTube. According to Media Partners Asia, the merged entity will have a 40 per cent share of the total revenue market for broadcasters and 45 per cent of the premium streaming market.
Disney-Star has the digital and TV rights to all men’s and women’ s events played under the International Cricket Council from 2024 to 2027. Viacom18 owns the streaming rights to the Indian Premier League. Together, they have paid a staggering $9 billion for all major cricket rights. In a notice to the firms earlier this year, the CCI questioned their almost 78 per cent viewership share in sports (cricket) on television and their ownership of the streaming rights, given the potential impact on market dynamics.
Once this merger is through, there will be only three large media firms left in India — Google India (around Rs 10,000 crore in revenue), Meta India (about Rs 18,000 crore) and Reliance-Disney. Then, there are the handful in the Rs 3,000 crore to Rs 8,000 crore band — Sony, Zee, Sun TV, PVR-Inox and so on. The rest is a bevy of firms from Rs 50 crore to Rs 3,000 crore across TV, print, films, and music.
The merger will create a consolidated entity this market has never seen before. And it is, rightly, worrying. But it also contains the seeds of the argument for the merger.
Over the last decade, all forms of media —whether films, television, streaming, newspapers or music — have been re-defined globally by Google, Meta, Netflix, Amazon, Spotify, and others. They offer audiences across genres and geographies at one-fourth the price of broadcast or publishing, walking away with 70-80 per cent of all digital advertising, even if a bulk of what is on offer is “user-generated content”—from short videos of cats and babies to financial advice and neuroscience talks.
On many of these platforms, the shorts —whether video or text — generated by professionals or regular media firms, do better. Shorts from Sony’s (formerly) The Kapil Sharma Show or the BBC’s Graham Norton Show, or from Shah Rukh Khan’s Jawan or CBS’s The Big Bang Theory tend to generate the highest levels of engagement.
However, the rules are set by tech-media platforms with their AdTech machines, low rates, and humungous global reach. The battle for all media firms (in any country) is scaling up to redefine the market and, therefore, the advertising pie. So far, no media company has successfully combined the massive reach of TV viewership with the growing power of online video to reshape the conversation — and the currency — around monetisation with advertisers.
RIL retains majority shareholding of the joint entity. At $120 billion in revenue, it is one of the few groups that can take on the $307 billion Alphabet (Google) or the $134 billion Meta (global revenues).
This assumes two things. One, RIL doesn’t play a price game that destroys value in the business for everyone. Two, the venture doesn’t get lost in the folds of a group that has far bigger businesses in gas, retail or telecom. Currently, the Viacom18 plus Star business brings in just about 2 per cent of RIL’s top line.
Theoretically, then, the merger’s potential to reshape the media business — and thus offer valuable lessons to others around the world—is enormous. This is why the finer details matter. Looking forward to this one, CCI.
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
