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Reliance Industries Nearing a Deal to Acquire Disney’s India Operations Amid Streaming Wars

Disney's Indian venture, primarily comprising the Disney+ Hotstar streaming service and Star India, was globally recognized as its largest in terms of user base last year.

Reliance Industries Nearing a Deal to Acquire Disney's India Operations Amid Streaming Wars

In a significant move that could reshape India’s entertainment industry landscape, Reliance Industries, led by Asia’s wealthiest tycoon Mukesh Ambani, is reportedly on the verge of striking a deal to acquire Walt Disney Co.’s operations in India. This development comes as Disney has been exploring options to offload or find a partner for its Indian assets, which have faced stiff competition, particularly from Reliance’s streaming platform, JioCinema.

Disney’s Indian venture, primarily comprising the Disney+ Hotstar streaming service and Star India, was globally recognized as its largest in terms of user base last year. However, the entry of JioCinema into the market, accompanied by its aggressive marketing strategy of offering free access to coveted content like the Indian Premier League (IPL) cricket tournament, has put Disney’s stronghold under considerable pressure.

According to reports, the negotiations between Disney and Reliance are advancing towards a cash and stock deal, valuing Disney’s Indian assets around $10 billion, though Reliance estimates the value between $7 billion to $8 billion. The potential acquisition could be formally announced as early as next month. This move reflects a change in Disney’s strategy from its initial consideration of selling the business in parts or finding a local partner to now selling a controlling stake to Reliance.

The rivalry between Disney and Reliance intensified when the latter secured a multi-year pact to broadcast Warner Bros Discovery Inc.’s HBO shows in India, a privilege previously held by Disney. Moreover, JioCinema’s acquisition of streaming rights to the IPL for a whopping $2.7 billion in 2022, further shifted the balance, making JioCinema the preferred platform for cricket enthusiasts, especially with its decision to broadcast the tournament for free.

The potential deal outlines that post-acquisition, Disney may retain a minority stake in its Indian enterprise. While this acquisition stands to significantly bolster Reliance’s foothold in the entertainment sector, it also highlights the challenges global streaming giants face in the intensely competitive Indian market.

Karan Taurani, Senior Vice President and Research Analyst at Elara Securities, highlighted that the proposition of Reliance offering Disney content free of cost could potentially dampen the overall growth rate of the Over-The-Top (OTT) industry as it might affect subscription video-on-demand revenue.

The possible acquisition also brings to light regulatory considerations due to the “sizeable” overlap in the urban genre between Reliance-owned TV18 Broadcast and Disney. As per Taurani, some channels might need to be discontinued to obtain regulatory clearance for the deal.

 

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