Bengaluru:
The merger of Disney-Reliance assets in India would create a media giant far larger than all its rivals, with streaming tech prowess and lucrative cricket rights that would enhance billionaire Mukesh Ambani’s entertainment ambitions.
Disney and Reliance on Wednesday valued their combined TV and streaming property business at $8.5 billion. Ambani’s Reliance and its partners will hold more than 63% stake in the merged entity, with Disney holding 37%.
The merged group boasting of 120 channels and two streaming platforms will be India’s number one group. 1 TV player, followed by homegrown Zee Entertainment which has 50 TV channels in India’s $28 billion media and entertainment market.
In streaming, Disney’s Hotstar is India’s largest with 38 million paid users. Netflix and Amazon Prime Video do not disclose their India figures, but industry analysts estimate they have 20 million and 6.5 million paid users, respectively.
Reliance’s JioCinema is largely free and does not disclose user numbers, having started offering premium payments only last year.
As its rivalry with Disney grew ahead of the merger, Reliance heavily promoted JioCinema, which became instantly popular with its free cricket streaming offer. But it also faced the wrath of users on social media for regular technology glitches.
Shashi Shekhar Vempati, former CEO of Prasar Bharati, said, “India’s media industry has historically not invested much in technological innovation. Reliance will benefit from Hotstar’s streaming and cloud-related technological innovations.”
He said, “Hotstar is ahead of JioCinema on many aspects of technology. It is better at making intelligent viewing recommendations based on a user’s viewing history and is more mature in showing live content to a large number of concurrent viewers without any glitches “
A Disney source, who declined to be named because they are not authorized to speak to the press, told Reuters that the company’s streaming service in India has for years mastered so-called server-side ad insertion technology that Allows them to monetize and target users. Rampant with ads while streaming live content.
Disney has about 55,000 different metric combinations to target users with ads — like age, location or more — the source added, adding, “It’s all been tested (and) Reliance can benefit from it. “
The Disney-Reliance deal was signed after Disney had struggled for years in India, particularly with its streaming business, which could not turn profits despite being the largest.
On Wednesday, Disney and Reliance said they will together “deliver a compelling, accessible and novel digital-centric entertainment experience.” The deal is expected to close later this year or early 2025, subject to regulatory approval.
business of cricket
Disney-Reliance will also dominate cricket broadcasting – both TV and digital.
Both companies have spent billions of dollars to buy broadcast rights to many top tournaments including the world famous Indian Premier League and the International Cricket Council’s India tournament.
According to media agency GroupM, cricket was expected to account for 85% of the total sports industry revenue in India during 2022. As Disney and Reliance combine, Jefferies analysts estimate the group will have the “most lucrative cricket rights” with a 40% share of the advertising market, ahead of rivals Sony and India’s Zee.
Cricket is big business in India, with local media reports estimating TV advertising rates as high as $29,000 for a 10-second slot during major cricket matches. The report said that placing a comparable ad during a football match in India costs about $3,000.
However, Indian lawyers caution that Disney-Reliance’s combined power of cricket broadcasting – in both the digital and TV sectors – could lead to antitrust investigations.
Analysts at India’s Ambit Capital said the merged entity could suffer losses of $1.2 billion to $1.8 billion in the coming years due to aggressive cricket rights bidding by the companies, as well as other companies’ digital advertising offerings. Have a strong grip.
While Disney is a big win for Ambani, Ambit said it will still be hard to challenge “the digital advertising power of Google and Meta.”
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
