Disney Is Planning an $8.5bn Merging Dealforthe Poor India Unit
Disney is combining forces with Asia’s richest man to solve the challenges that are weighing down its streaming performance in India. The company recently announced that Star India service will be merging with Viacom18, an Indian entertainment network backed by Mukesh Ambani’s Reliance Industries, in a new deal worth $8.5bn. With this new deal, Reliance will now lead the business which is counted as one of the biggest media companies in the country. According to reports, Reliance has pledged to inject a massive $1.4bn (£1.1bn) to help the firm grow even further.
According to Forbes, Mr. Mukesh Ambani has built a massive fortune in oil and chemical industries and is now worth more than $100bn. He called this deal a “landmark agreement that heralds a new era in the Indian entertainment industry”. Both companies said that they expected this deal to be completed by the end of this year or early next year. However, this deal still needs to be approved by the regulators to proceed. The combined firm would now be able to boost more than 120 channels and will serve around 120 million customers across the entire country.
Viacom 18 was created in 2007 resulting from a partnership between Paramount and Reliance and currently runs approximately 40 channels including Nickelodeon, MTV India, and Hindi-language Colors, along with the JioCinema streaming services. On the other hand, it has been hard for Disney’s Star business in India. It inherited Rupert Murdoch’s Fox Empire when it bought a chunk in 2019. Reliance outbid Disney for the rights to stream the popular India Premier League cricket tournament in 2022. This sparked a sizable fall in the subscriber count of Disney’s Hotstar streaming service.
Disney’s Star Sports channel also saw a decline in viewership resulting in a notable fall in advertisers in the first 12 months to September 2023. Bob Iger, the CEO of Disney said that this joint venture would now keep the company in the huge Indian market while it continued to benefit from Reliance’s “deep understanding of the Indian market and consumer”. However, the new deal between Reliance and Disney values Star India at less than a third of what it was originally in 2019 when Disney took over the business. In this deal, Disney will roughly own a 37% stake which includes exclusive rights to distribute Disney’s films and other productions in India. The joint venture will give Viacom 18 a roughly 47% share, leaving Reliance with another roughly 16% share. Nita Ambani, the wife of MukeshAmbani will serve as chairperson of the newly merged company.
India has now emerged as one of the main battlegrounds in the streaming industry and business. This is making streaming giants like Netflix, and Amazon put heavy investments into trying to seize the parts of what seems to be a speedily growing market. The number of Over-The-Top or OTT video-streaming consumers in India was at 350 million in 2020. Now with the rapidly growing consumer count, the industry is expected to have around 600 million video-streaming consumers by 2025. This is a reflection of the growing trend of video streaming platforms in the massively-populated country.
