The Competition Commission of India (CCI) has recently approved the Reliance and Disney merger for their entertainment businesses. However, this update comes just after the CCI previously expressed concerns about the merged entity controlling most of the broadcasting rights for cricket and TV in India. This will also create India’s largest entertainment business with 120 TV channels and two streaming services.
Everything About The Reliance And Disney Merger
With this merger, both media giants have committed not to raise the advertising rates unreasonably for cricket matches. They have also decided to sell some non-sports TV channels. This merger will create one of India’s biggest entertainment players that will compete with Sony, Netflix, and Amazon. It will also give Mukesh Ambani a stronger hold on the media and entertainment sector.
In this merger, 80 channels of Disney+ and 40 channels of Viacom18 will be added. The joint venture will also be given the exclusive right to distribute several films and productions in India. This will also help them to expand their businesses and reduce risks. Additionally, Mukesh Ambani led company will have a 63.16% stake and Disney will have a 36.84% stake in the newly formed company.
Issues Related To This Merger
🚨 CCI has approved the merger of Reliance-owned JioCinema and Viacom18 with Disney's Star India and Hotstar.
This is what Reliance Industries' media empire looks like after the deal 📺💻📱
Source: Morgan Stanley pic.twitter.com/dlnCaWNeBm
— The Arc (@thearc_hq) August 29, 2024The approval of this merger came with significant scrutiny, especially regarding the dominance of the two companies in the sports broadcasting and advertising sectors. The CCI raised a concern that the bidding patterns for sports rights could reportedly stifle the competition further.
Another significant concern was about the impact on the advertising market. Both the firms are significant contenders in this sector and this merger can reduce the number of competitors. This in turn could lead to less competitive pricing for advertisers.
Conclusion
India is a huge market for entertainment services. In such a situation, American streaming companies like Netflix, and Amazon have been attracted to the Indian market. Both the companies are also on OTT, which is facing competition from Netflix and Amazon.
