Disney and Reliance Industries have moved closer to a merger of their massive Indian TV and streaming businesses. A combination of the two – which include rival streaming platforms, India’s leading pay-TV platform and over 100 linear TV channels – has the potential to substantially re-shape the Indian media and entertainment scene.
Quoting unnamed sources close to the deal, the Reuters news agency reported on Thursday that the two companies had appointed lawyers to handle potential anti-trust issues that would likely arise. The agency named both law firms retained.
Reuters also said that a non-binding merger term sheet had been signed by the parties at the end of December.
Neither Reliance Industries nor Disney have offered any comment to repeated enquiries from Variety.
Disney became one of the largest players in the Indian entertainment field when it bought 21st Century Fox. The former Murdoch family-led operation included the Star pay-TV platform and the wildly popular Hotstar streaming startup. Disney subsequently merged Hotstar into its own Disney+ platform to create a mass-market streamer with a low price point.
Disney’s dominance has been challenged by the Ambani-controlled Viacom18 group and its suite of Jio-branded operations that stretch from mobile phones, to broadband internet and, latterly, streaming service JioCinema.
In what may have been a huge miscalculation in 2022, Disney failed to win the streaming rights for the 2023-2027 seasons of the Indian Premier League cricket tournament, which it had shown on Hotstar. Paying roughly $3 billion each, Jio took the streaming rights, while Disney secured only the pay-TV rights. And when Jio streamed the IPL free of charge in 2023 it was able to undercut Star and cause Disney+ Hotstar to lose tens of millions of users.
With Reliance Industries’ hugely deep pockets, Jio has already been able to profit from one aspect of Hollywood’s ongoing consolidation and the Wall Street imposed drive for financial rectitude. Early last year Jio became the new streaming home in India for HBO, Max Original and Warner Bros content, effectively precluding the launch of HBO Max in India in the near to medium future. The HBO win was also a loss for Disney as the WBD content had previously been carried on Star TV.
Were a deal to be completed, Reliance-Viacom18-JioCInema would likely own a majority stake in the merged entity.
But, the same cricket rights which may have brought Disney to the negotiating table may be a sticking point in the merger process. In order to appease anti-monopoly regulators, some of the IPL rights, which would otherwise all be under one roof, may have to be ceded to rival operators.
Another (unknowable) factor is India’s other potential media and entertainment mega-merger. Sony, which operates channels and a smaller streamer in the country, is currently attempting to merge with Indian TV and streaming conglomerate Zee Entertainment Enterprises. That deal has been more than two years in the offing and could still fail to be completed. Were the Sony-Zee deal completed to create another behemoth, Jio and Disney may have less trouble getting a green light from regulators, ministries and courts.