The Competition Commission of India (CCI) has granted approval for the merger between Reliance Industries and Disney, paving the way for the formation of India’s largest entertainment company. The deal, valued at approximately $8.5 billion, involves the consolidation of their media assets in India and brings with it significant implications for the entertainment landscape in the country.

Details of the Merger

The merger has been approved with certain proposed modifications submitted by both parties involved. Earlier, the regulator had expressed concerns about the implications of the merger, specifically regarding cricket broadcasting rights and competition in the Over-the-Top (OTT) streaming sector. CCI’s decision comes after extensive discussions and responses from both parties addressing these initial concerns.

Key Stakeholders

According to the announcement made by the CCI via a post on social media platform X, the regulatory body has approved the proposed combination involving Reliance Industries Limited, Viacom18 Media Private Limited, Digital 18 Media Limited, Star India Private Limited, and Star Television Productions Limited. Once the agreement is executed, Reliance and its affiliates will hold a substantial 63.16% stake in the newly formed media company, while Disney will retain 36.84%.

Regulatory Concerns Addressed

Initially, CCI had raised various questions regarding the proposed joint venture, particularly in relation to the cricket broadcasting rights and potential anti-competitive issues. CCI is required by law to issue orders within 30 calendar days after being informed about a merger, but it does possess the authority to conduct a thorough investigation to uncover any potential anti-competitive practices, often involving public consultations.

Implications for the Television Industry

1. Viacom18, owned by Reliance, currently operates around 40 television channels, including popular networks such as Comedy Central, Nickelodeon, and MTV.
2. Disney Star operates nearly 80 channels, well-known for its Hindi family dramas and Western cinema.
3. Viacom18 holds the broadcasting rights for domestic and international cricket matches under the Board of Control for Cricket in India. Moreover, Disney has retained the TV rights for the extremely popular Indian Premier League (IPL) until 2027.
4. The combined channel offerings will cover a wide array of genres including general entertainment, sports, children’s programming, documentaries, and lifestyle shows, extending to multilingual content.

Dominance in the OTT Space

1. Disney retains digital rights for International Cricket Council matches in India until 2027, while Reliance’s Jio Cinema has outperformed Disney in acquiring the streaming rights for IPL until 2027.
2. A collaborative content library of over 200,000 hours will be shared between Jio Cinema and Disney’s Hotstar, encompassing dramas, films, and sports events.
3. According to a report by the Federation of Indian Chambers of Commerce and Industry and EY, Hotstar was the second most downloaded video streaming app in India in 2022, following MX Player.
4. Disney’s streaming content boasts global blockbusters and popular franchises like the Marvel Universe, while Ormax’s analysis highlights that in 2022, it streamed seven of India’s top 15 most-watched original shows.
5. Last year, Jio Cinema entered into agreements with The Pokémon Company and Warner Bros to expand its content offerings by incorporating more international and Hollywood productions.

Conclusion

The merger between Reliance Industries and Disney marks a significant shift in the Indian media and entertainment sector. With the combined resources and content libraries of both entities, this merger is poised to create a powerhouse that not only dominates the television industry but also establishes a formidable presence in the OTT space. As the entertainment landscape evolves, the implications of this merger will be closely monitored by industry experts and regulators alike.