Disney and Reliance: A potential merger between Walt Disney’s India unit and Mukesh Ambani’s media business, Reliance, is under consideration, creating a major entertainment entity in India. Both companies have significant streaming services and TV channels, raising concerns about potential antitrust scrutiny. Lawyers suggest that a deal of this magnitude would likely draw intense regulatory attention, requiring asset divestment to gain approval.
Disney’s Hotstar streaming app, despite being a major player, has faced losses, making a merger an attractive proposition. If successful, this would be the second transformative merger in India’s TV and streaming landscape, with Sony planning to merge its India business with Zee Entertainment.
However, antitrust lawyers warn that the emergence of two dominant entities, especially in competition with Netflix and Amazon, could create a duopoly with substantial anti-competitive power. The deal would likely face scrutiny due to increased market concentration post the Zee-Sony merger.
Regulatory focus would particularly target the streaming businesses of Disney and Reliance, considering their influence on advertising during cricket matches, a sport of immense popularity in India. Disney Hotstar owns the rights to International Cricket Council matches, while Reliance’s JioCinema has rights for the Indian Premier League (IPL).
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Regulators would be concerned about the combined entity dictating advertising rates in streaming, potentially leaving advertisers with limited bargaining power. In TV, the merged entity, combining Disney’s Star brand and Viacom18’s channels, could dominate the market, raising further regulatory concerns.
The Competition Commission of India (CCI) would closely evaluate market share, potential pricing power, and the impact on competition in various segments. Estimates suggest that a Disney and Viacom18 combination would have a significant share of the TV ads market, making it challenging for competitors.
To address antitrust concerns, divesting certain channels or offering commitments not to raise ad rates could be options for the merged entity. However, the path to regulatory approval appears challenging, given the likely concentration of market power. Both Disney and Reliance declined to comment on the potential merger.
Our Reader’s Queries
Who owns Reliance Entertainment now?
Mukesh Ambani took over Reliance Industries and IPCL, while his younger brother Anil Ambani was given charge of the telecom, power, entertainment, and financial services businesses of the group. Anil Dhirubhai Ambani Group now comprises of Reliance Communications, Reliance Infrastructure, Reliance Capital, Reliance Natural Resources, and Reliance Power.
Who is the owner of Reliance company?
Disney has control over both linear and digital services through the Hotstar brand, while Reliance’s Viacom18 joint venture manages streaming services under the JioCinema brand.
Does Reliance own Hotstar?
As the biggest private-sector enterprise in India, Reliance Industries has its hands in a variety of industries, including oil refining, petrochemicals, gas, retail, and textiles. With over $60 billion in consolidated sales, this company is a major player in the Indian economy.