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Will the Jio-Disney Jodi dominate Indian content ahead?

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Last year Reliance owned Viacom 18 started a chain of dominoes that may lead to it being the undisputed leader in Indian content for the foreseeable future.

Like everything else done by Reliance Industries in its Telecommunications and Digital Segment Jio, it was a long-planned event that ended with a bang.

They purchased the digital rights for the Indian Premier League for 23,575 Crores. This was done with the backing of Uday Shankar, the former Chairman of Star India and President of Walt Disney Asia Pacific and James Murdoch, the son of media baron Rupert Murdoch.

This was shown on Jio Cinema. The platform that lost the rights was the previous entity run by these media stalwarts Disney+Hotstar, the largest OTT platform of Disney and the leading platform in India.

How did it affect Disney+Hotstar?

Disney+ Hotstar was the largest OTT platform in India, more than 2x Amazon Prime and 3x Sony LIV.

In the October 2022, it had 61 million paid subscribers. This has reduced by over 33%. It currently stands at 40 million. Even during the period of high subscribers, the entity had made losses of INR 343 Crore. This would only get worse.

Why does this come at a bad time for Disney?

Disney has been undergoing turmoil globally with CEO Bob Chapek being fired in November 2022, and former CEO Bob Iger returning to the company for another two years.

It has been struggling to keep up with its technology driven rivals. A major portion of its profits coming from its Parks division. In a price sensitive country like India, competing against deep pocketed rivals such as Amazon and Reliance may just prove too expensive.

If it happens, how will the merged entity look?

The combined entity would have 43% of the ad market share in India, significantly ahead of the 25% of Zee Sony. Disney Star currently having 32% and Viacom 18 with 11%, 108 TV channels and the country’s largest OTT platform with a dominance on cricket. Consolidating the sports main events under a single platform once again.

Disney values the entity at $ 10 Billion, while Reliance looks at it closer to $7 Billion. The deal is reported to partly be cash, partly stock and will continue to have Disney as a minority shareholder.

What about the other bidders?

The publicly listed Zee Enterprises and Sony India are going through their own $10 Billion TV merger which has gone through many hurdles from investors, regulators, courts and bankers.

They had reportedly also started discussions with Disney for sale of their India business but could they manage to outbid Asia’s richest man who is backed by the Murdoch family and Uday Shankar. That would be a tall order.

But so would competing with Reliance. Sony’s platform Sony Liv currently has 18 million paid subscribers.

While it was said that the Adani Group and Sun TV were looking to bid as well. There has not been any more reports regarding that.

Looks like it might just be full speed ahead for Reliance.

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