If a movie streaming acquisition is approved, Indians might be on the verge of enjoying watching The Bear, Succession, Deadpool, and the real series Bigg Boss all on one system.
The deal, which brings together the media assets of India’s largest conglomerate Reliance Industries and entertainment giant Walt Disney, has sparked both excitement and concerns over potential monopolistic dominance in the Indian entertainment and advertising industries.
The$ 8.5bn ( £6.5bn ) merger aims to create India’s largest entertainment company, potentially capturing 40 % of the TV market, reaching 750 million viewers across 120 channels, and dominating the advertising sector.
This strengthens Disney’s position in the difficult American industry while aiding Reliance’s expansion efforts. Additionally, it pits the new leisure behemoth against well-known rivals like Netflix, Amazon Prime Video, Sony, and 50 different streaming services.
Consider the approach of this innovative entertainment big: Disney’s Star India operates more than 70 TV stations in eight language, while Reliance’s Viacom18 runs 38 programmes in eight language. Both have access to big streaming services, including Hotstar and Jio Cinema, as well as video productions.
Owning the rights to broadcast a sizable amount of India’s athletics events, including the wildly acclaimed Indian Premier League baseball event, amplifies their influence even more.
In a cricket-obsessed society, this is a primary business location. According to Elara Capital, a world purchase and consulting firm, the merged entity is reportedly in charge of 75 to 80 % of the American sports streaming market, across both straight TV and online platforms.
Reliance and Disney will have a significant share of the overall advertising business due to their dominance in this industry, particularly cricket. It showcases” solid growth in an industry where activities is a key driver of viewers on both TV and online programs”, says Karan Taurani, an scientist at Elara Capital, who calls it a “large internet juggernaut”.
Although the acquisition promises to offer customers a variety of information, critics wonder if it places too little power in the hands of just one person.
Any competition firm would sit up and take notice of the development of a large in the market, according to KK Sharma, who previously led the merger manage division of the Competition Commission of India (CCI).
According to analysts, India’s competition watchdog reviewed the agreement before approving it with a proviso that reads” content to the conformity of deliberate modifications.”
Although the two companies have not yet made these “voluntary modifications” people, it is reported that they have committed to not exceptionally raising advertising rates while streaming bowling games.
The agreement depends on these assurances, adds Mr. Sharma, because the CCI “retains its power to actually break the business- if the strong enterprise becomes a threat to competition in the market.”
Both Disney and Reliance have a lot to gain from the deal, which gives them a chance to consolidate their pole position in an increasingly competitive but expanding Indian streaming market.
However, experts warn that it could also result in a potential decline in the business profits of smaller players.
” 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 he cautions that other streaming companies may struggle to raise prices if the combined company can also make use of Reliance Jio’s large telecom subscriber base, he adds.
The Reliance Group has a tried-and-true business model that has allowed it to succeed in India’s price-sensitive market: it launched Jio in 2016 with cheap mobile data, and its JioCinema streaming subscription is only 29 rupees ( 0.35 ) per month.
Reliance chairman Mukesh Ambani has also promised “unparalleled content at affordable prices” as a result of this agreement.
The cost of programming and content will cause concern for other streaming services. Will they be forced to drop prices”? says media and entertainment industry specialist Vanita Kohli-Khandekar. She claims that Reliance’s practice of selling goods for” trash” usually “destroys value” for its rivals.
Although streaming competitors may be simpler to deal with, the new company will also face significant opposition from rivals with large budgets, such as Google, Meta, and Amazon, who have been attempting to expand in India.
According to a report from research firm Media Partners Asia, these global tech giants “have played a crucial role in expanding India’s video market, which is currently estimated to be worth$ 8.8 billion in revenue for content owners.” In 2022-23, Google’s YouTube alone had an 88 % share in India’s premium video-on-demand (VOD ) market.
The new Reliance-Disney behemoth hopes to monopolize not just sports, news, and movies, but also transfer these large corporations ‘ digital advertising revenues to its own pockets.
” Now, it’s an even fight”, says Ms Kohli-Khandekar. You must have scale in order to compete with some of the large global corporations that are active in India, according to the statement” about 80 % of digital revenues go to Google and Meta.”
However, she warns that the new company will need to deliver quality with quantity, even though it may have scale and heft. For instance, if the streaming industry becomes more reliant on views over subscriptions, “programming quality will only be good on one or two apps,” she says.
” That is something I would be on the lookout for.”