Reliance nears deal to acquire Disney’s India business, report says

A deal to buy Disney’s Indian operations is allegedly nearing completion at Reliance Industries, headed by Mukesh Ambani, in a strategic move that may drastically alter the digital and television environment in India. Disney estimates the worth of its Indian operations at $10 billion, whilst Reliance estimates the same amount at $7–$8 billion. Should this agreement materialize, it may have a significant effect on India’s media and entertainment industry.

Credits: Tech Crunch

The Players: Reliance Industries and Disney

Reliance Industries: Reliance Industries is a conglomerate with a diverse range of business interests, spanning from oil and telecommunications to retail and digital services. Mukesh Ambani, India’s richest man, has been driving Reliance’s expansion into the digital space with its Jio platforms, making it a force to be reckoned with in India’s fast-growing digital economy. The potential acquisition of Disney’s India business aligns with Reliance’s overarching strategy of broadening its digital and television assets.

Disney’s India Business: Disney, a global entertainment giant, has made significant investments in India over the years, most notably with its acquisition of 21st Century Fox’s entertainment assets for $71.3 billion. This acquisition included Star India, a critical asset for Disney’s global streaming expansion. Star India’s Hotstar platform boasted around 150 million monthly active users at the time of acquisition. However, it’s worth noting that in recent years, Hotstar’s dominance in the Indian video streaming space has faced challenges.

The Current Landscape:

For a number of quarters, Hotstar dominated the Indian video streaming market. But it has faced fierce competition, particularly from Viacom18, supported by Reliance, which paid a whooping $3 billion to obtain the five-year streaming rights to Indian Premier League (IPL) cricket events. Disney also had to shell out a big amount of money to get the rights to broadcast IPL material on TV for five years.

Reliance’s Digital Ambitions:

Reliance Industries has not been complacent in its quest to dominate the digital media space in India. Over the last year, it has actively recruited top industry leaders and engineering talent to strengthen JioCinema, its on-demand streaming service. JioCinema has been enriched with premium content from renowned sources like HBO and NBC, making it a formidable contender in the Indian streaming market.

Disney’s Hotstar Challenges:

Hotstar’s problems in 2023 are apparent because the service is said to have lost 20 million users this year. Watching IPL matches on JioCinema attracted a large number of people, demonstrating Reliance’s disruptive power in the digital media space. Hotstar has been providing free mobile streaming of the current cricket World Cup in an effort to woo back users. It’s so good that it broke the record for the most concurrent watchers of on-demand videos globally, pulling in an incredible 35 million during a cricket match. With 43 million concurrent views during an India vs. New Zealand match, it even broke this record.

Impact of the Potential Deal:

Strengthening Reliance’s Digital Empire: If Reliance successfully acquires Disney’s India business, it would further bolster its presence in the digital media sector. This move could help Mukesh Ambani’s conglomerate maintain its impressive momentum in expanding its digital offerings.

Consolidation in the Streaming Industry: The acquisition could lead to consolidation in the Indian streaming industry. The merging of Disney’s assets with Reliance’s digital portfolio could create a formidable player that may challenge the dominance of established platforms like Netflix and Amazon Prime in India.

Content Wars: With Disney’s vast content library and Reliance’s deep pockets, the combined entity would likely invest heavily in content production. This could lead to a content war in India, benefitting consumers with more choices and quality programming.

Pricing and Subscription Models: The merger might result in innovative pricing and subscription models in a bid to attract and retain subscribers. This competition could lead to more affordable streaming options for Indian consumers.

Global Streaming Impact: The deal’s repercussions might not be limited to India. The influence of Disney’s acquisition of 21st Century Fox was felt globally, especially with its impact on Disney’s streaming service, Disney+. A similar trend could emerge if Reliance acquires Disney’s India business, influencing the broader global streaming landscape.