A mega merger goals to reshape India’s leisure panorama | EUROtoday

Imagine binge-watching The Bear, Succession, Deadpool and actuality present Bigg Boss all on one platform – an leisure bonanza may very well be simply across the nook for Indians if a blockbuster streaming merger goes by way of as anticipated.

The deal, which brings collectively the media belongings of India’s largest conglomerate Reliance Industries and leisure large Walt Disney, has sparked each pleasure and issues over potential monopolistic dominance within the Indian leisure and promoting industries.

The $8.5bn (£6.5bn) merger goals to create India’s largest leisure firm, probably capturing 40% of the TV market, reaching 750 million viewers throughout 120 channels, and dominating the promoting sector.

This provides Disney a stronger foothold within the difficult Indian market whereas supporting Reliance’s enlargement efforts. It additionally pits the brand new leisure behemoth towards standard rivals equivalent to Netflix, Amazon Prime Video, Sony and 50-odd different streaming platforms.

Consider the attain of this new leisure large: Disney’s Star India operates greater than 70 TV channels in eight languages, whereas Reliance’s Viacom18 runs 38 channels in eight languages. Both personal main streaming platforms – Jio Cinema and Hotstar – and movie studios.

Their affect is additional amplified by proudly owning the broadcasting rights to a big variety of India’s sports activities occasions, together with the massively standard Indian Premier League cricket match.

In a cricket-obsessed nation, this can be a prime enterprise place. The merged entity is estimated to manage 75-80% of the Indian sports activities streaming market throughout each linear TV and digital platforms, based on Elara Capital, a world funding and advisory agency.

Their dominance on this sector, particularly cricket, implies that Reliance and Disney will command a considerable share of the general commercial market. It showcases “strong growth in an industry where sports is a key driver of viewership on both TV and digital platforms”, says Karan Taurani, an analyst at Elara Capital, who calls it a “large media juggernaut”.

Though the merger guarantees to supply shoppers numerous content material, critics surprise if it places an excessive amount of energy within the fingers of 1 participant.

“The emergence of a giant in the market… with the next competitor struggling with market share in a single digit, would make any competition agency sit up and take notice,” says KK Sharma, who previously headed the merger management division of the Competition Commission of India (CCI).

This is why, analysts say, India’s competitors watchdog scrutinised the settlement earlier than approving the cope with a caveat that makes it “topic to the compliance of voluntary modifications”.

The companies have not made these “voluntary modifications” public yet, but reports say that the two companies have pledged to not raise advertising rates excessively while streaming cricket matches.

The deal hinges on these assurances, Mr Sharma adds, because the CCI “retains its authority to even divide the enterprise – if the dominant enterprise turns into a menace to competitors out there”.

In an more and more aggressive however increasing Indian streaming market, each Disney and Reliance have so much to realize from the deal, which permits them an opportunity to consolidate their pole place.

But specialists warn that it could additionally imply a possible drop within the enterprise earnings of smaller gamers.

“The Indian market values bundling and is price-sensitive. [Subscribing to] this combined entity can offer a comprehensive package including [access to] web series, movies, sports, original content, and a global catalogue,” says Mr Taurani.

And if the mixed firm may also leverage the big telecom subscriber base of Reliance Jio, different streaming corporations could discover it laborious to boost costs, he provides.

The Reliance Group has a tried-and-tested enterprise technique that has allowed it to thrive within the price-sensitive Indian market: it supplied low cost cellular information when it launched Jio in 2016, and its JioCinema streaming subscription is on the market for as little as 29 rupees ($0.35; $0.26) a month.

From this deal too, Reliance chairman Mukesh Ambani has promised “unparalleled content at affordable prices”.

“Other streaming platforms will be worried about the cost of content and the cost of programming. Will they be forced to drop prices?” says media and leisure trade specialist Vanita Kohli-Khandekar. She says that the Reliance technique of providing issues at throwaway costs normally “destroys value” for rivals.

Streaming rivals is perhaps simpler to deal with however the brand new firm may also face stiff problem from different rivals with deep pockets, equivalent to Google, Meta and Amazon, who’ve been attempting to broaden in India.

These international tech giants have “played a pivotal role in expanding India’s video market, now estimated to be worth $8.8bn in revenue for content owners”, based on a report by analysis agency Media Partners Asia. In 2022-23, Google’s YouTube alone had an 88% share in India’s premium video-on-demand (VOD) market.

So the brand new Reliance-Disney behemoth will hope to dominate not simply information, motion pictures and sports activities, but additionally redirect digital promoting revenues from these large corporations to its personal coffers.

“Now, it’s an even fight,” says Ms Kohli-Khandekar. “Some 80% of digital revenues go to Google and Meta, so you have to have scale, and finally, you have a company that can take on some of the large global majors operating in India.”

But she warns that while the new entity might have scale and heft, it will also need to deliver quality with quantity – if, for instance, the streaming market becomes more dependent on views rather than subscriptions, “programming quality will be good only on one or two apps”, she says.

“That is something I would watch out for.”