After months of speculation, it’s official: Reliance and Disney have merged their media operations.
Reliance, its subsidiary Viacom18, and Disney have announced the merging of their media business. As a part of the deal, Reliance will own 16% of the new entity, Disney will own 36%, and Viacom18 will own the remaining 47 stake. The joint entity has been valued at $8.5 billion, including a fresh $1.4 billion investment that Reliance will put into the venture.
The merger has created India’s largest media and entertainment business. The entity will run 115 linear TV channels, of which Star India will contribute 77, and Viacom18 will contribute 38. The entity will have two massive streaming platforms in JioCinema and Disney+Hotstar. The new entity will be a true media juggernaut — the venture will have over 750 million viewers across India and will also cater to the Indian diaspora across the world.
“We have always respected Disney as the best media group globally,” said Reliance Chairman Mukesh Ambani. “We are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group,” he added.
The deal is a bit of a coup for Reliance — not long ago, Reliance had been at loggerheads with Disney+Hotstar through its own digital play in JioCinema. Last year, Reliance had removed Disney+Hotstar from Jio’s telecom plans, which caused Disney+Hostar to lose millions of subscribers. Reliance had followed this up by outbidding Hotstar for the IPL rights, and wrested away Hotstar’s prized possession. But Reliance hadn’t stopped there — it had then taken away Hotstar’s HBO portfolio comprising of hit shows including Succession, Game of Thrones and Curb your enthusiasm, and even its F1 streaming rights.
And the impact had immediately shown on Disney+Hotstar’s subscriber base. At the end of December 2022, Hotstar had 5.75 crore subscribers, but had lost 46 lakh subscribers to end up with 5.29 crore subscribers in April 2023. The decline has then precipitated, and Hotstar was just left with 4.04 crore subscribers in July. Hotstar had 5.84 crore subscribers in July 2022, so it had lost 30% of its user-base over the last year.
It appears that because of these a aggressive moves, Reliance has emerged as a majority stake in the combined entity, in spite of being a much smaller business — Star India’s revenue are nearly 5 times as high as Viacom18’s, and Disney+Hotstar also makes significantly more money than JioCinema. But Disney is struggling in its home market of the US, and doesn’t seem to have the stomach for a protracted fight with Reliance in India — Star roughly breaks even on its TV business, while Hotstar loses money. As such, Disney appears to have agreed to join forces with Reliance, which would ensure that it would continue to have a footprint in the Indian market in the foreseeable future.
But the deal would be seen as a bigger win for Reliance, given how it’s managed to become the majority shareholder in the new entity. JioCinema had appeared to hemorrhage money as it took on Hotstar — it had outbid Star for the IPL and HBO rights, and also broadcast the IPL for free on JioCinema. But it appears these moves were mere posturing to show its intent in the Indian market. And with Disney capitulating and ending up merging with Reliance’s Viacom18, Reliance might’ve got more than a fair return on its JioCinema investment over the last few quarters.