Reliance-Disney Merger to Create India’s Largest Network: 120 Channels, 2 OTTs
Reliance-Disney Merger Set to Dominate Indian Entertainment Industry
Reliance Entertainment and Disney have officially announced their merger, which has received approval from the Competition Commission of India (CCI). This merger is set to create India’s largest entertainment company, with a substantial presence in the sports broadcasting sector. The new entity is projected to have a viewership of 75 million across the country.
Channels and OTT Platforms:
The merged entity will combine Disney Star’s 80 channels with Reliance Viacom18’s 40 channels, bringing the total to 120 channels. However, some of these channels might be discontinued post-merger. Additionally, the company will operate two major OTT platforms—Disney Hotstar and Jio Cinema. With this merger, the company will amass over 200,000 hours of digital content.
Viacom18 holds the television rights for BCCI-managed cricket matches, while Disney Star holds the TV rights for the IPL until 2027. On the OTT front, Reliance’s Jio Cinema already streams IPL matches. It’s noteworthy that Reliance’s news channels, under the Network 18 group, are not part of this merger deal.
The joint venture will also secure the licensing of over 30,000 Disney content properties and exclusive distribution rights for Disney films and productions in India.
Why the Merger?
According to Disney CEO Bob Iger, the intense competition in the market necessitates this merger to create a stronger entity capable of maintaining a dominant position. The new company is expected to have the largest OTT subscriber base, with Disney Hotstar contributing approximately 36 million paying subscribers and Reliance contributing 15 million, totaling around 51 million subscribers.
The partnership with Reliance provides Disney with opportunities to expand its business while mitigating risks. For Mukesh Ambani, this merger strengthens his hold on the entertainment industry, estimated to be worth $28 billion (about ₹2.3 lakh crore). The new company will be well-positioned to compete with giants like Sony and Netflix.
Advertising Market Share:
Post-merger, the new company is expected to capture 40% of the Indian advertising market in the TV and streaming segments. The company will dominate the advertising revenue in cricket, along with broadcasting rights for Wimbledon, MotoGP, and the English Premier League.
Impact on Consumers:
India’s entertainment services market is vast and competitive, attracting global streaming giants like Netflix and Amazon. With both Reliance and Disney also competing in the OTT space, the merger could lead to the launch of more affordable subscription plans, benefiting consumers directly. Disney viewers will gain access to Reliance’s content, and vice versa.
Deal Valuation and Leadership:
The merger is valued at $8.5 billion (approximately ₹71,000 crores). Post-merger, Reliance will hold a 63.16% stake, while Disney will own 36.84%. Nita Ambani is expected to be the Chairperson of the newly formed company.
Completion Timeline and Challenges:
The deal is expected to be finalized within six months, pending approval from the Indian company tribunal. Former CCI head K.K. Sharma has indicated that if completed, this merger would create a “big fish in the broadcasting market” with “a monopoly over cricket advertising revenue.”
