Experts decode impact of Reliance-Disney mega $8.5 billion media joint venture

"Epic deal" is what the experts are calling the mega $8.5 billion media joint venture announced by Reliance Industries Ltd and Walt Disney on Wednesday, February 28.

"It is an epic deal, in the sense it kind of heralds a very new era of sorts for the Indian entertainment and telecommunication sector as a whole," market expert Prakash Diwan told CNBC-TV18.

Reliance Industries Ltd (RIL) and The Walt Disney Company on Wednesday announced the merger of their India TV and streaming media assets, creating an $8.5 billion or ₹70,000 crore entertainment behemoth with RIL holding a controlling stake with over 63% of the combined entity. Nita Ambani, wife of Reliance Industries Chairman Mukesh Ambani, will head the joint venture while Uday Shankar will act as Vice Chairperson.

Giving his reasons, Diwan further added, "While we value the entire media communication sector, currently in India at under $30 billion, and there's just probably 8–8.5% whereabouts, it is significant in terms of what it can do, given what Reliance carries in terms of its strength as a carrier as well. So, its content and carrier getting together in a way that is so formidable."

The JV is expected to be completed in the last quarter of the calendar year 2024 or the first quarter of 2025. It would create the biggest firm in the Indian media and entertainment sector, with over 100 channels in several languages, two leading OTT platforms and a viewer base of 750 million across the country.

Karan Taurani, Senior Vice-President, Elara Capital, said, "This is good news for the industry because on the linear TV side, there is a struggle in terms of growth. Both of these players coming together will make for better growth in terms of potential market share."

Talking about the merged entity's market share, particularly in sports content, Taurani said, "They will become monopolistic in sports. On the linear TV side and the digital side, they could command about 75% to 80% market share as far as sports advertising is concerned."

Echoing similar views, Diwan said the entire JV puts Reliance and Disney in a very formidable position, and it will be difficult for others to be able to replicate it.

Professor Raghunath Subramanyam, IIM Bangalore, also sees the JV as great news for the viewers and opines that it will create a "structural disruption."

"If you were to look at the other players, they are going to fret about this change in the dynamics of the market," he told CNBC-TV18.