How Reliance-Disney Star Deal Will Reshape Content, Competition, and Consumption in India

Reliance changed the face of the Indian OTT sector by revamping the Jio Cinema app in 2023 by announcing a slate of over 100 Indian language originals along with collaborations with HBO, Peacock and Paramount to stream foreign content on their platform . That wasn't enough for Reliance, as the Mukesh Ambani-led conglomerate was finalizing a merger with Disney Star to become an even bigger force to reckon with.

Discussions on the merger of giants Reliance and Disney Star have been going on for some time now and the latest update states that a non-binding agreement was signed between Reliance Industries and Walt Disney Co. in London last week. The mega-merger is just a few steps away. The entertainment and media merger is expected to be finalized in February 2024, although Reliance has been keen to finalize things by the end of January.

This merger will establish a 51-49 partnership between RIL and Star India. Jio Cinema will also be part of this deal. Reliance will hold a 51% stake while Star India will retain 49% of the shares. The deal will be a boon for OTT platform Disney+Hotstar which has been suffering losses for some time now.

When these two largest conglomerates come together, changes will happen in the entertainment and OTT sectors of the country. Here's what could happen.

Reliance-Disney Star deal: high-stakes cricket rights

Since both Reliance and Star India hold maximum television and digital broadcasting rights to major cricket tournaments, the effect of the merger on cricket advertising and viewing will be enormous. The two giants together own cricket rights worth nearly Rs. 55,000 crore which includes major cricket properties like the IPL, ICC men's and women's tournaments and other Indian bilateral series. This is for the next 4-5 years.

Once the merger is completed, with RIL being a major stakeholder, it will take over Disney Star's digital business or its entire business. If the dependency is only on the digital business, they will get the rights to broadcast the World Cup, but if they cater to the entire business, all major cricket events will come into the fold of RIL -DisneyStar.

For those who don't know, Reliance's broadcasting division is Viacom 18 and has 38 TV channels in 8 languages, Jio Cinema App and Viacom 18 Film Studios. Disney India's operations include the Disney+Hotstar platform, more than 70 television channels in 8 languages ​​and a film studio.

If Reliance takes over the entire business of Star India, they will have a monopoly with 80-90% rights to cricket events. RIL will then be able to charge advertisers more and put cricket behind a paywall for viewers. Besides, RIL's decision will also be which series they want to release on paid streaming and which ones are free or how much they want to charge for a certain duration. This means that watching cricket on OTT could be expensive in the coming year, unlike in 2023, when the IPL, Asia Cup and World Cup were streamed for free.

Reliance-Disney Star deal means largest catalog of Bollywood and Hollywood content

The coming together of 2 giants will also bring about huge changes in the OTT space. Smaller OTT platforms will want to consolidate with RIL & Star India. Global OTT platforms like Netflix could come under pressure as the reach of Indian content and platforms widens. Several Indian OTT players may also start offering free content.

Jio Cinema has partnered with HBO, Peacock, Warner Bros. and Paramount+ to offer global content. This gave rise to shows like Game of Thrones, Parks and Recreation, The Office, Suits, Law & Order, Euphoria, Mare of East Town, Succession, Sopranos, Your Honor, Fatale Attraction, Madam Secretary and many more. Not only international, but Jio has also roped in some of the biggest names in Bollywood like Shahid Kapoor (Bloody Daddy), Randeep Hooda (Inspector Avinash), Genelia Deshmukh (Trial Period), Sonam Kapoor (Blind), Arshad Warsi (Asur ), and others to produce original Hindi films and shows.

Also, as Star and Reliance come together, the budget for producing shows and films will improve. That means bigger scale, better actors, and hopefully better quality content. Every time a merger takes place, it has both positive and negative consequences. As some markets and genres will experience overlap, some channels/properties may need to be removed.

Reliance-Disney Star deal shakes up Indian streaming wars

According to data released for the third quarter of 2023, Disney+Hotstar has left Netflix India behind in terms of subscribers. Disney+Hotstar leads with a 27% subscriber market share, followed by Amazon Prime Video with 21%. Global giant Netflix managed to get 12% subscribers, which is disappointing considering the level of the platform. Jio Cinema managed to get only 4% of subscribers. However, if Reliance and Star India join forces, this consumption share will exceed 30%, which will be much more than Netflix and Prime Video.

The merger between the other two bigwigs Sony and Zee has been in the works for a while now and if it also happens, there will be 2 big networks in India instead of 4-5. This will mean a duopoly in the entertainment sector.

Reliance-Disney Star deal: a game changer for India's entertainment landscape

As viewers, OTT services have become a major source of entertainment for many. When both mergers are 100% sealed, the outlook will begin to change. Consolidation would mean subscribing to 2-3 lesser OTT platforms. The content will be streamed on a single app instead of 2 or 3, so downloading an app will save space on your devices, as well as having to remember when to renew which subscription will be overcome.

The quality and quantity of content will also be affected. As their forces unite, the giants will have bigger budgets and better resources. This could lead to better, more watchable content. So, once it comes to fruition, this deal will be a game changer for the entertainment landscape in India.

You can follow Smartprix on Twitter, Facebook, Instagram and Google News. Visit smartprix.com for the latest news, reviews and technical guides.