Disney India has reached a preliminary agreement to sell 60% of its business to Viacom 18, according to a report by the Wall Street Journal. With this agreement, a large portion of the company’s business would now fall under Viacom 18 and its parent company Reliance Industries Limited. This news comes soon after a similar merger between Zee Entertainment Enterprises and Sony Pictures was terminated late last month.
In December 2023, it was reported that Disney and Reliance had signed a non-binding term sheet, with a 51:49 split in favor of Reliance with expectations of winding up commercial and regulatory processes by February this year. It is expected that after the merger, Viacom 18 (which includes Reliance’s streaming service JioCinema) will create a “step down subsidiary” that will absorb Star India. The two have also reportedly appointed law firms and have begun anti-trust due diligence for their reported merger.
The changing landscape of content streaming:
The merger of these two companies marks the contraction of the online streaming market in India. Previously, Disney+Hotstar (Disney India’s streaming service) lost streaming rights for the cricket tournament, Indian Premier League (IPL) and HBO’s content to Reliance’s streaming service JioCinema. Of these, IPL proved to be extremely beneficial for JioCinema with 32 million people watching IPL at its peak, as per Jio’s earnings call in July. Interestingly in both July and November 2023, Disney+Hotstar saw a decline in its subscriber base.
Disney+Hotstar isn’t the only service to experience this decline. According to data collated by the investment bank UBS’s Evidence Lab, the company has seen 0% growth in monthly active users in India in the fourth quarter of 2023.
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