Will the Jio-Disney Jodi dominate Indian?

Last year, Reliance-owned Viacom18 initiated a series of strategic moves that may cement its position as the leader in Indian content for the foreseeable future. Following a meticulously planned strategy, Reliance disrupted the market by acquiring the digital rights for the Indian Premier League (IPL) for ₹23,575 crore. This deal was executed with the backing of Uday Shankar, former Chairman of Star India and President of Walt Disney Asia Pacific, along with James Murdoch, son of media mogul Rupert Murdoch.

The rights acquisition shifted IPL's streaming to JioCinema, displacing Disney+ Hotstar, which had previously dominated the Indian OTT space.

How Did This Impact Disney+ Hotstar?

Disney+ Hotstar was the largest OTT platform in India, boasting over 61 million paid subscribers as of October 2022—more than double Amazon Prime and triple SonyLIV. However, losing the IPL rights triggered a massive exodus of subscribers, reducing its base by over 33% to 40 million. Even at its peak, Disney+ Hotstar incurred losses of ₹343 crore, a financial strain likely to worsen post-IPL.

Why Is This Particularly Challenging for Disney?

Globally, Disney has been facing upheavals. In November 2022, CEO Bob Chapek was replaced by his predecessor, Bob Iger, who returned to stabilize the company amid rising competition from tech-driven rivals. Disney's profit margins now rely heavily on its Parks division, while sustaining its OTT operations in a price-sensitive market like India is becoming increasingly challenging against deep-pocketed competitors like Reliance and Amazon.

What Could a Merged Entity Look Like?

If Reliance successfully acquires Disney's India operations, the combined entity would command a dominant 43% share of the ad market, surpassing Zee-Sony's 25%. Disney Star currently holds 32% of the ad market, while Viacom18 controls 11%. Together, they would operate 108 TV channels and India’s largest OTT platform, consolidating key cricketing events under one platform.

Disney values its India business at $10 billion, whereas Reliance estimates it closer to $7 billion. The deal is expected to involve a combination of cash and stock, with Disney retaining a minority stake.

What About Other Potential Bidders?

Zee Entertainment and Sony India, themselves navigating a $10 billion merger, were reportedly in talks with Disney to acquire its India operations. However, competing with Reliance, backed by Asia's richest man Mukesh Ambani, the Murdoch family, and Uday Shankar, would be a formidable challenge. Sony’s platform, SonyLIV, currently has 18 million paid subscribers, far behind Disney+ Hotstar's numbers even after its decline.

While there were earlier reports of interest from Adani Group and Sun TV, no concrete developments have emerged.

Full Speed Ahead for Reliance

With its deep pockets, strategic partnerships, and a vision to dominate Indian content, Reliance appears to be accelerating toward a commanding position in the media landscape. If this acquisition materializes, it would mark another significant milestone in Reliance’s journey to reshape India’s digital and entertainment sectors.