Indian Media Landscape Set to Shake as Viacom18 and Star India Eye Merger

1 Feb 2024 , 11:44 AM

Industry experts estimate that the proposed agreement between Walt Disney’s Star India and Reliance Industries’ Viacom18 might result in the creation of India’s largest media and entertainment conglomerate, with a top line of almost Rs 25,000 crore.

If the merger goes through, the merged company will have two robust streaming platforms—Disney+ Hotstar and Jio Cinema—and 115 TV stations (Star India: 77 and Viacom: 18–38). The combined company would have a collection of more than two lakh hours of content.

Walt Disney is currently in negotiations with several parties, including Reliance; however, given the intricacies involved, particularly the value of Star India, a.k.a. Disney Star, it is anticipated that the purchase will take some time to close.

Aside from a strategic alliance, Disney is considering a number of options for its company in India, including selling all of its TV and streaming properties.

The bulk of Viacom18 is owned by Reliance; other shareholders include Paramount Global, Bodhi Tree, and the businesses of James Murdoch and Uday Shankar.

It’s one step closer to the media industry’s consolidation, which many analysts believe is already happening.

With combined revenues of Rs 25,000 crore in FY23, the Star-Viacom18 combination will have a substantially higher top line than the Sony-Zee merged company, which had close to Rs 15,000 crore in FY23.

According to the FICCI-EY analysis, the Indian M&E business, which was valued at Rs 2.1 lakh crore in 2022 and is projected to rise at an 11.5% annual rate to reach a market size of Rs 2.34 lakh crore in 2023, may include one of the largest deals ever, in the case of Reliance-Disney.

Thanks to their over 40% share of the TV broadcast market (Star 30%+ and Viacom18 10+%) and their near-dominance of the digital video streaming market (with Disney+ Hotstar & Jio Cinema), Star-Viacom18 will have a significant advantage in two of the largest segments of the Indian M&E market: TV and digital. They will surpass global giants like Netflix and Amazon Prime Video, who have not yet established scalable streaming businesses in the Indian market.

In addition to the income benefits, the combination may also experience lower costs for marketing, distribution, and content creation.

With strong Hindi general entertainment channels like Star Plus and Colours and a near-monopoly in sports thanks to properties like the IPL, ICC digital rights, BCCI, Cricket Australia, Cricket South Africa, Premier League, LaLiga, and Olympics 2024, the combined company will be a formidable force in both linear and digital entertainment and sports.

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