India’s Media Sector To Witness Major Shake-Up With Disney-Reliance Merger; Ambani The ‘Big Daddy’ Of Media And The Business of Cricket As Media Titans Unite

The impending merger between Reliance Industries Ltd subsidiary Viacom18 and The Walt Disney Company's local unit Star India can change the dynamics of India's media and entertainment sector. With industry executives and experts hailing it as a landmark development, the consolidation is set to create the largest media entity in the country. Moreover, with the impending merger between Disney and Reliance, cricket broadcasting will also likely undergo a seismic shift - cricket isn't just a sport in India; it's a billion-dollar industry that captures the nation's heart and drives significant revenue. The impact of the agreement could also extend to the telecom industry, where competitors like Bharti Airtel may come under pressure to enhance their content offerings, as per industry analysts.

In what could be a game-changer for India’s media and entertainment sector, the proposed merger between Reliance Industries Ltd subsidiary Viacom18 and The Walt Disney Company’s local unit Star India is set to create a behemoth in the industry.


The merged entity, valued at a whopping Rs 70,352 crore ($8.5 billion), with RIL injecting Rs 11,500 crore, is set to dominate the market with over 40% viewership share. The dominance not only secures premium advertising rates but also boosts consumer average revenue per user (ARPU), making it a force to be reckoned with.

The failed merger between Zee Entertainment Enterprises and Sony Pictures Networks India is expected further likely to bolster the position of Star-Viacom18, as it avoids a potential duopoly scenario that could have emerged if the Sony-Zee merger had gone through.

Reliance, Disney, Media sector

Creating A Giant

The collaboration between Disney and Reliance signifies a key shift in the Indian media sector, with the merged entity becoming a media giant dwarfing its competitors; with a significant stake in the merged entity, Reliance and its affiliates will hold more than 63%, while Disney will own the remaining 37%.

This consolidation will result in a conglomerate boasting 120 channels and two streaming platforms, positioning it as the leading TV player in India. It will surpass home-grown Zee Entertainment, which currently operates 50 TV channels in India’s thriving $28 billion media and entertainment market.

In the streaming realm, Disney’s Hotstar emerges as the largest player with 38 million paid users, followed by estimations of 20 million and 6.5 million paid users for Netflix and Amazon Prime Video, respectively. 

Reliance’s JioCinema, although largely free, has made strides in the market, particularly with its cricket streaming offers, despite encountering occasional technology glitches.

The merger not only marks a convergence of assets but also represents a technological leap forward for Reliance, with Disney’s Hotstar bringing advanced streaming and cloud-related tech innovations to the table. 

Hence, Hotstar’s expertise in intelligent viewing recommendations and seamless live content streaming is expected to enhance the merged entity’s capabilities significantly.

Similarly, Disney’s expertise in server-side ad insertion technology, enabling targeted advertising at scale during live content streaming, presents a lucrative opportunity for Reliance to capitalize on. 

Therefore, with over 55,000 different metric combinations for ad targeting, Disney’s experience in this domain is poised to benefit the merged entity.

For Disney, the merger represents a strategic move to shore up its position in India, especially in the streaming segment, where profitability has been elusive despite commanding a substantial market share.

The collaborative efforts between Disney and Reliance are geared towards offering consumers a new digital-focused entertainment experience, promising accessibility and innovation; the deal, subject to regulatory approvals, is anticipated to be finalized later this year or by early 2025.

The Business of Cricket

Cricket isn’t just a sport in India; it’s a multi-billion-dollar industry that commands the attention of millions; now, with the impending merger between Disney and Reliance, the stakes are set to soar even higher in the cricket broadcasting arena.

Both Disney and Reliance have spared no expense in securing broadcast rights for top cricket tournaments, including the highly popular Indian Premier League (IPL) and various tournaments under the International Cricket Council (ICC) in India. 

In fact, cricket alone contributed a staggering 85% to India’s total sports industry revenue in 2022, according to media agency GroupM.

With the merger, analysts predict that the combined entity will wield unparalleled power in cricket broadcasting, potentially dominating 40% of the advertising market, leaving competitors Sony and India’s Zee trailing behind. 

The allure of cricket is such that TV ad rates for a mere 10-second slot during key matches can reach as high as $29,000, dwarfing the rates for other sports like football by a significant margin.

Some Challenges

However, the consolidation of cricket broadcasting under Disney-Reliance’s umbrella has raised concerns among Indian lawyers regarding potential antitrust scrutiny. 

The sheer dominance in both the TV and digital spaces could draw regulatory attention, especially given the massive investments and aggressive bidding for cricket rights, which may lead to substantial losses in the coming years.

Despite the formidable position of Disney-Reliance, challenges persist, particularly in the face of digital advertising giants like Google and Meta. Analysts caution that while the merger presents a significant opportunity, the digital advertising strength of these tech behemoths remains formidable.

Nevertheless, the merger promises to reshape the landscape of sports broadcasting in India. 

Star-Viacom18, as part of the merged entity, will enjoy exclusive rights to key cricket properties, along with an extensive library of movies and TV shows. This consolidation of TV and digital rights is expected to unlock new avenues for monetization over time.

Moreover, with a substantial investment pledge of approximately Rs 82,000 crore ($10 billion) in sports rights for the 2023-27 period, the merged entity aims to strengthen its sports offerings and achieve profitability by enhancing subscriber average revenue per user (ARPU) and ad rates.

The Umbrella

Beyond cricket, the combined entity will boast premium English content from major studios like Disney, NBC Universal, Paramount Global, and HBO, positioning itself as a formidable competitor in the premium over-the-top (OTT) segment, challenging the likes of Netflix and Prime Video.

With Reliance and Viacom18 jointly owning a 63% stake in the venture and Disney holding the remaining 37%, the infusion of funds from Reliance emphasizes its vision to invest in sports and digital content, both lucrative streams. 

The strategic move not only consolidates the market position of the merged entity but also reinforces Reliance’s resolve to stay ahead in the face of digital advertising giants.

Big Daddy

The impact of the agreement could extend to the telecom industry, where competitors like Bharti Airtel may come under pressure to enhance their content offerings, as per industry analysts.

Estimates suggest that telecom operators allocate between Rs 2,000 to 3,000 crore towards acquiring content. Abneesh Roy, Executive Director at Nuvama Institutional Equities, remarked that the merger poses a challenge for other broadcasters and telecom players, given that Reliance Jio will enjoy privileged access to content.

Roy also noted that the merger could have a slightly adverse effect on advertisers, as the merged entity would wield greater bargaining power. 

However, in the realm of media, dominance often prevails, with the joint venture poised to emerge as the leading figure in the industry, overshadowing competitors by a significant margin.

The Last Bit, the Disney-Reliance merger marks a significant milestone in the evolution of India’s media and entertainment sector, particularly in the realm of cricket broadcasting. 

As the two giants join forces, they are set to shape the future of sports broadcasting and digital entertainment in the country – and, of course, catapulting Reliance Entertainment as the ‘Big Daddy’ of entertainment in India.


Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker