Reliance-Disney merger creates a $8.5 billion media giant

In a strategic merger that underscores the growing influence of media conglomerates in India, Reliance Industries and Walt Disney completed an $8.5 billion deal to form a new media powerhouse. This joint venture (JV), valued at INR 70,532 crore, is structured around three key divisions: entertainment, digital streaming, and sports.

The merger combines the considerable resources of Reliance’s media assets, including its Colors TV channels and JioCinema streaming platform, with Disney’s Star network and Hotstar streaming service.

According to Mukesh Ambani, chairman and managing director of Reliance Industries, the collaboration will provide “unparalleled content choices at affordable prices” for Indian audiences, with a specific emphasis on digital access. This new venture aims to streamline content delivery across platforms and maximise reach in a country of over 1.4 billion people.

Disney’s chief executive, Robert A Iger, echoed the potential of the partnership, noting it would enhance the company’s presence in the Indian market and allow for a broader offering of entertainment and sports content. “By joining forces with Reliance, we can expand our presence in this important media market and deliver viewers an even more robust portfolio of entertainment, sports content, and digital services,” he said in a press statement.

A strategic split: Three key divisions

Nita Ambani, will be the chairperson of the new entity, while media veteran Uday Shankar will act as vice chairperson to lead the venture’s strategic growth. Shankar, also co-founder of Bodhi Tree Systems, noted, “The new organisation is committed to delivering an unprecedented level of creativity, disruption, and new age consumer experience. Together, we aim to build India’s largest integrated media platform.”

The new JV, tentatively named JioStar, will operate under a carefully structured framework to manage each of its core divisions. The entertainment portfolio will be led by Kevin Vaz of Reliance’s Viacom18 Media. This division integrates Reliance’s Colors network with Disney’s Star network, creating a major player in television content, with a large repertoire of regional, national and global content.

Former Google executive Kiran Mani will lead the digital division, which brings JioCinema and Hotstar under one umbrella. Its digital division has already amassed over 50 million subscribers, and with JioCinema and Hotstar now integrated, analysts expect further subscriber growth driven by exclusive sports rights and an expanded content library. This will position the JV entity, as a strong competitor to streaming services like Netflix and Amazon Prime, especially when it is coupled with Reliance’s existing partnerships with HBO and its deep-rooted understanding of the Indian market are strategic advantages.

Sanjog Gupta from Disney’s Indian sports operations will be responsible for the sports division. It will oversee sports broadcasting, with extensive rights to cricket tournaments including those by IPL, ICC, and BCCI, in addition to a variety of other sports content.

The JV has been in the works for several months and received the green light from India’s Competition Commission (CCI) in August 2024 after both companies addressed potential concerns over control of cricket broadcasting rights. It was also approved by the National Company Law Tribunal (NCLT), the Ministry of Information and Broadcasting, and international antitrust regulators in the EU, China, Turkey, South Korea, and Ukraine.

Reliance Industries controls a 16.34% stake in the JV, with Viacom18, its subsidiary, holding a 46.82% majority. Disney retains the remaining 36.84%. The merged entity expects pro forma revenue of approximately INR 26,000 crore (~$3.1 billion) for the fiscal year ending March 2024, consolidating its position as a leading force in Indian media.

Implications for India’s advertising landscape

The JV is well poised to transform India’s media landscape and expand its advertising influence, as it consolidates a large range of assets and talent from both companies. This could also pose a challenge to global streaming giants in one of the world’s fastest-growing media markets.

According to the Ormax OTT Audience Report 2024, India’s OTT user base has expanded by 14% over the past year, reaching 547.3 million people, representing a penetration rate of 38.4%.  This increase in the OTT audience is primarily due to a 21% rise in the advertising video on demand (AVOD) segment, while the subscription video on demand (SVOD) category saw a slight decline, shrinking by 2%.

The creation of this media giant is expected to have a substantial impact on India’s advertising landscape. By leveraging digital assets and focusing on a “digital-first” approach, the new media giant seeks to engage India’s tech-savvy, mobile-first consumers.

With 120 TV channels and two major streaming services, the JV offers brands and marketers unprecedented access to a vast and diverse audience. The advertising opportunities on JioCinema and Hotstar, especially, combined with a high-profile sports portfolio, create new avenues for brands aiming to reach an extensive viewership across both linear TV and digital platforms.

The company’s strategic expansion into regional content, including the four major South Indian languages as well as Marathi and Bengali, enhances its reach among rural and regional audiences. Such a comprehensive approach aligns well with current advertising trends in India, where brands are increasingly targeting regional and language-specific markets.

The JV’s control over the rights of several of the big-ticket sporting events solidifies its position as a primary destination for sports content. Cricket, India’s most-watched sport, has always been a significant draw for advertisers. In the past, cricket broadcasting rights have attracted some of the highest advertising spends in India, and the JV’s monopoly over these events is likely to sustain this trend.

As Gupta puts it, the merger aims to “cultivate a bold, transformative vision that challenges the status quo,” and sports broadcasting is central to this objective. With rights across multiple sports, the JV also plans to diversify beyond cricket, enhancing engagement and ad opportunities in other popular sports.

Industry observers view the Reliance-Disney JV as a response to the shifting media consumption patterns in India, where integrated TV-digital ecosystems are becoming the norm. With mobile and internet penetration continuing to grow, digital streaming services are rapidly overtaking traditional TV in urban markets, while linear TV remains popular in rural areas. The JV is poised to exploit this dual market dynamic, offering a range of content that appeals to both urban and rural viewers.

As the JV moves forward, it faces competition from global media players like Netflix and Sony on a national as well as local companies in the regional areas. Yet, with its extensive resources and robust leadership, it is expected to remain a formidable competitor in the evolving media landscape.

As India’s largest integrated media platform, this JV promises to influence not only the country’s media and entertainment space but also reshape advertising, introducing innovative opportunities for brands in the rapidly evolving digital landscape. For now, all eyes will be on how this powerhouse reshapes Indian media—and how competitors will respond.