DTVE Data Weekly: Insights into Reliance and Disney deal

Source: Omdia

With rumors of negotiations first surfacing in October 2023, Reliance, a powerful conglomerate with interests in retail, telecoms, and entertainment, now looks closer to acquiring Disney’s Indian business in a multi-billion dollar deal. An initial agreement was signed in late December 2023.

The deal’s impact on India’s OTT landscape will be significant, as Disney-owned platform Disney+ Hotstar is currently India’s market leader in advertising revenue and subscribers.

Earlier in 2023, Reliance-led companies deprived Disney+ Hotstar of its prime asset, digital rights to the Indian Premier League (IPL), causing its platform JioCinema to substantially increase its advertising revenue and expenditure in the year. IPL advertising revenue in 2023 reached record levels on linear TV and digital platforms, but the synergy between OTT and linear TV that had existed in the previous five-year rights window was broken—a trend that will likely be reversed if the merger goes through.

The exact amount of the acquisition is yet to be agreed upon, and the precedent of the Sony-Zee merger suggests that the deal may take a long time to reach completion, perhaps encountering legal and regulatory hurdles. A Disney exit would represent an attempt on its part to sell high, with Disney+ Hotstar breaking the record for concurrent streams during the November 2023 Cricket World Cup final.

But with the platform’s paid OTT subscriber count decreasing substantially over 2023 and broadcast rights to India’s international cricket games soon to lapse, the future of the Indian business as a reliable profit source for the US media giant seems doubtful.

An issue that could attract regulatory interest is Disney Star’s position as India’s leading linear TV channel network. The merger with a consolidated Viacom18 entity will likely dominate India’s TV market

Daoud Jackson is Omdia’s senior analyst, TV & online video.