The merging of Reliance’s and Disney’s Indian media assets, along with Viacom18, will lead to a new entity capturing 85% of the country’s on-demand streaming service audience and approximately half of the TV viewers, analysts have pointed out. This merger will pose significant challenges to competitors like Netflix, Amazon’s Prime Video, Apple, Sony, and Zee.
The merger process is expected to finalize by March 2025 and will grant exclusive digital and broadcast rights to various major sporting events, including the next four years of popular cricket tournament IPL, flagship ICC events, domestic Indian cricket, FIFA World Cup, Premier League, and Wimbledon.
The streaming of cricket matches has been a key driver for attracting new users to streaming platforms in India. By securing rights to numerous cricket events, Disney and Reliance have limited the content options for rival services to attract fans.
“The new combined entity has obtained both digital and TV rights to major cricket sporting events in India, such as IPL and ICC matches,” noted Morgan Stanley analysts in a recent report.
“The broadcast of IPL 2023 now falls under the Joint Venture (JV) – Viacom 18 holds the digital streaming rights (acquired for US$2.9bn), while Star possesses TV broadcasting rights worth US$2.8bn. During IPL 2023, JioCinema streamed matches for free to all users, impacting Hotstar’s revenues. However, with the JV structure, we may witness significantly improved profitability,” the analysts added.
Image Credits: Bernstein
The merged entity will also hold exclusive rights in India to Disney’s movies and productions, along with a broad selection of content from HBO, Warner Bros., Showtime, and NBCUniversal. It will serve as the digital hub for content from these renowned studios.
Analysts at Bernstein estimated that the combined operations of Disney’s Hotstar and JioCinema will secure a dominant position in the Indian OTT market, accounting for around 85% of the monthly active user base.
Image Credits: BofA
Disney’s Star, a part of its India portfolio, currently holds 41% of the broadcast market in India. When combined with Viacom18’s 8% share of the TV market, the merged entity, featuring approximately 120 TV channels, is set to dominate around 49% of the broadcasting market.
Bank of America analysts reported that the two companies will capture 56% of the Hindi-speaking TV audience in India. In a joint statement released on Wednesday, Disney and Reliance expressed their target to reach 750 million users in India through this joint entity.
