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Reliance-Disney Merger: Reshaping the Industry Landscape

This joint venture will combine media assets across various entertainment domains.

India’s media and entertainment industry has witnessed a big development as Reliance Industries and Walt Disney have announced a joint venture. They will merge their streaming and TV operations in India to create an entertainment giant worth 8.5 billion dollars, i.e., a 70,352 crore media powerhouse, which has happened after about four months of negotiations. 

The merged entity will be chaired by Nita Ambani, with former Walt Disney executive Uday Shankar as the vice chairperson. The joint venture will bring together media assets across entertainment, TV channels, and sports channels. 

The Merged Entity- Impact Over TV and OTT Platforms

This joint venture will combine media assets across various entertainment domains, including TV channels such as Colors, Star Plus, and Star Gold, and sports channels like Star Sports and Sports 18. Additionally, OTT services like Jio Cinema from Reliance and Hot Star from Disney will also be included, providing viewers with a wide range of content. 

Moreover, this joint venture will hold exclusive rights to distribute Disney films and productions in India. As a result, popular cricket properties like IPL and TV soaps will be available to millions of households on one accessible platform.

Disney Star India and the Alliance’s Viacom 18 have a combined viewership of over 750 million across India, making the merger a milestone in the industry. The merged entity will offer viewers 120 channels and two streaming services.

This comes after a long struggle for Disney to stop a user exodus from its streaming business in India and the financial burden of paying billions of dollars for Indian cricket rights.

Ownership Status 

Reliance, led by Asia’s richest man, Mukesh Ambani, will inject USD 1.4 Billion into the merged entity. The Alliance will control the joint venture, i.e. RIL will control the JV, with a 16.34% ownership. Viacom18 will own 46.82% of the JV, while Disney will own 36.84%. Additionally, Disney may contribute certain media assets to the JV, subject to regulatory and third-party approvals.

The new board will have 10 members, with Reliance nominating 5, Disney nominating 3, and 2 independent directors, respectively.

According to sources from Reuters news agency, the Indian business of US entertainment giant Disney was valued at just one-quarter of its 15-billion-dollar valuation when Disney acquired it as part of its Fox deal in 2019, as a result of a recent merger.

Impact on the rivalries and other platforms

The merger between Disney’s Indian business and Reliance is a firm move to fend off competition from traditional rivals such as India’s Zee Entertainment and Japan’s Sony, as well as streaming services such as Amazon and Netflix. 

The establishment of the joint venture is subject to receiving regulatory, shareholder, and other customary approvals and is expected to be completed by the first quarter of 2025. The announcement of this merger comes less than a month after Sony and Zee cancelled a 10-billion-dollar merger that would have posed a significant challenge to Reliance and Disney.

The recent merger of Reliance and Disney has caused a lot of speculation about its impact on the TV and OTT industry in India, as well as the potential disruption it could cause to the Google-Meta media duopoly. While some experts believe that the new entity may challenge the tech giants in the broader sense, it is not expected to significantly impact Google-Meta as they are not in direct competition. However, some industry analysts predict that the combined digital entity could rival Google’s video-on-demand platform, YouTube. Reliance Industries and Walt Disney have announced the merger of Viacom18 and Disney Star, making it the country’s largest media company. According to market estimates, the merged entity will control over 40% of TV advertising and 42% of the total market share. 

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