Reliance and Disney Forge Joint Venture
Reliance and Disney Forge Joint Venture
On February 29th, 2024, Reliance
Industries Ltd (RIL), Viacom18 Media Pvt Ltd, and The Walt Disney Company
entered into agreements to establish one of India’s largest television and
streaming conglomerates. This collaboration integrates Viacom18 with Disney’s
Star India, aiming for substantial growth in the digital entertainment sector
within the country.
Partnership and Agreement Details
According to the binding contracts, RIL's subsidiary, TV18
Broadcast Limited, with a majority stake in Viacom18, will bring in Disney as a
strategic investor. This involves merging Viacom18 with Star India Private
Limited, Disney’s media hub in India.
Following the integration, RIL will infuse INR 11,500 crore
into the combined entity, retaining a 51% stake. Disney will hold 36.3%, and
the remaining ownership will be with Paramount Global. This capital injection
is intended to support content production and the expansion of streaming
platforms.
The joint venture combines Star India’s leading media
networks, the OTT platform Hotstar, and prominent sports rights with Viacom18’s
broadcast channels, digital assets, and an extensive movie library. Industry
estimates suggest that the unified operation captures approximately 52% of the
TV audience and over 75% of streaming viewership share in the domestic market.
Strategic Growth Initiatives
The merged entity aims to provide premium viewing options to
more than 900 million Indian TV and digital consumers. Utilizing the strengths
of partner brands and intellectual properties, the joint venture seeks to boost
online video penetration, projected to reach 600 million users by 2025.
Key business objectives include increased investment in
local productions, licensing of global content tailored for Indian audiences
across various entertainment genres such as movies, web series, and sports.
The company also plans to enhance last-mile digital
connectivity through Reliance Jio and upgrade backend infrastructure with the
rollout of 5G technology. Additionally, it aims to establish a more extensive
regional content portfolio beyond the primary Hindi markets.
Regulatory Clearance
According to RIL officials, Viacom18 and Star India will
continue to function independently until the transaction is finalized. The
finalization is contingent upon customary approvals and conditions, including a
Scheme of Arrangement to be submitted before the National
Company Law Tribunal.
Industry analysts predict that the deal will likely comply
with competition guidelines, given the limited current overlap between Star and
Viacom18’s media operations. However, Disney's withdrawal from the Hindi
entertainment sector is anticipated to reshape the competitive landscape of the
rapidly growing broadcast and streaming industry.
Broader Market Implications
Experts view the deal as a transformative consolidation that
will elevate much-needed investment in the Indian entertainment sector. The
expanded options for quality content creation are expected to benefit
consumers, talent, and related industries.
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