Reliance, Disney form joint venture to merge TV, OTT business in India | Company News – Business Standard

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Mukesh Ambani-owned Reliance Industries, Viacom18 Media and The Walt Disney Corporation on Wednesday entered an agreement to form a joint venture that would merge the television and digital streaming businesses of Viacom18 and Star India and create an entertainment giant in India. A joint statement pointed out that the value of the JV at Rs 70,352 crore ($8.5 billion) was on post-money basis, excluding synergies.


As part of the transaction, the media undertaking of Viacom18, a RIL group company, will be merged into Star India Private, a Disney-owned firm, through a court approved scheme of arrangement. RIL would invest Rs 11,500 crore ($1.4 billion) into the JV to fund its growth strategy post-closing. Nita M Ambani will be the chairperson of the venture while media veteran Uday Shankar will be the vice-chairperson.


The JV will be controlled by RIL, owned 16.34 per cent by RIL directly and another 46.82 per cent by Viacom18.  Disney will own the remaining 36.84 per cent.  

Mukesh Ambani, RIL chairman and MD, called it a landmark agreement heralding a new era in the Indian entertainment industry. “We have always respected Disney as the best media group globally and 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,” he said. 


We welcome Disney as a key partner of Reliance group,” Ambani further said.


The Walt Disney Company chief executive Bob Iger said: “India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long term value for the company.’’ Saying that Reliance has a deep understanding of the Indian market and consumer, Iger added:  ‘’Together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content.”


“We are privileged to be enhancing our relationship with Reliance to now also include Disney, a global leader in media & entertainment,’’ Uday Shankar, co-founder of Bodhi Tree Systems, said. Pointing out the goal to deliver exceptional value to the audiences, advertisers, and partners, Shankar said: ‘’This joint venture is poised to shape the future of entertainment in India and accelerate the Prime Minister’s vision of making Digital India a global exemplar.”


The JV will bring together media assets across entertainment (such as Colors, StarPlus, StarGOLD) and sports (Star Sports and Sports18) including access to highly anticipated events across television and digital platforms through JioCinema and Hotstar. The JV will have over 750 million viewers across India and will also cater to the Indian diaspora across the world. 


The announcement by RIL and Disney came within weeks of Japan’s Sony Group Corp calling off the merger agreement of its India unit with Filesadmin.co Entertainment Enterprises that would have created a $10-billion media giant. Sony and Filesadmin.co are now fighting a legal battle over the termination of the merger agreement.


In 2019, Walt Disney Corp had paid $71 billion to buy 21st Century Fox to get a sizable market position in India. At that time, Fox’s TV assets in Asia and the Star pay-TV business in India were the main attraction for the acquisition. Earlier in 2012, Disney had acquired UTV, a film studio and an operator of multiple TV channels and later in 2017, Disney closed down UTV Motion Pictures, so as to focus on distributing its Hollywood movies. 


The RIL and Disney statement said the new venture will seek to lead the digital transformation of the Indian media and entertainment industry in India and offer consumers high-quality and comprehensive content offerings. “The combination of the media expertise, cutting-edge technology and diverse content libraries of Viacom18 and Star India will allow the JV to offer more appealing domestic and global entertainment content and sports live streaming services, while delivering an innovative and convenient digital entertainment experience at affordable prices,” said the statement.


With the addition of Disney’s acclaimed films and shows to Viacom18’s renowned productions and sports offerings, the JV will offer a compelling, accessible and novel digital-focused entertainment experience to people in India and the Indian diaspora globally. The JV will also be granted exclusive rights to distribute Disney films and productions in India, with a licence to more than 30,000 Disney content assets.


“It is a landmark deal. Reliance has positioned itself as a dominant player in the media sector which is consolidating and there is no other large player other than Sony and Filesadmin.co. The JV entity is valued at over Rs 70,000 crore on post money basis in which RIL will own a majority stake,” Aliasgar Shakir, senior group VP at Motilal Oswal said. 


Last April, the JioCinema OTT platform became a part of Viacom18 portfolio after the completion of the transaction for strategic partnership with Reliance, Bodhi Tree Systems, and Paramount Global. As part of the transaction, the JioCinema app became a part of the Viacom18 portfolio apart from giving Viacom18 access to Rs 15,145 crore in cash for expansion. 


Viacom18, which won the digital streaming rights of IPL,  created new viewership benchmarks on the opening weekend itself last year, drawing over 100 million new viewers.

First Published: Feb 28 2024 | 11:12 PM IST