What a Reliance-Disney India deal could mean: JioCinema-Disney+ Hotstar combine & 100+ TV channels

An entertainment behemoth with more than 100-odd TV channels in at least eight languages, a mega OTT app with the largest subscriber base and the strongest distribution might, as well as the coming together of other entertainment businesses is what is in the making if Reliance Industries does indeed acquire Disney’s India business.

Billionaire Mukesh Ambani’s RIL is reportedly nearing a deal to acquire Disney India’s television and digital businesses, in what could be the largest such deal in the Indian entertainment landscape—much bigger than the proposed merger between Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Limited (ZEEL) that was first announced in September 2021.

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Disney’s India business includes streaming platform Disney+ Hotstar, a significant linear TV business in the form of 70-plus TV channels in eight languages, as well as a film studio. Reliance’s broadcast division Viacom18 owns 38 TV channels in eight languages, video OTT app JioCinema and Viacom18 Studios.

Disney reportedly values the India business at around $10 billion, whereas Reliance’s valuation of the assets is reportedly $7–8 billion.

Brokerage firm Elara Capital’s senior analyst and Vice President Karan Taurani estimates the digital streaming business to be valued at $3–3.5 billion, while its international catalogue will account for $0.5–1 billion and the TV business at $5.5 billion. “From a content valuation standpoint, Disney Star’s TV business is higher than OTT because they have massive clout on television, whereas IPL has gone away from Disney+ Hotstar. TV is also crucial because it provides catchup content on OTT.”

On the TV front, the players together have a 40 per cent advertising share and 35-40 per cent share in the Indian television network market.

On the OTT front, the combined might of JioCinema and Disney+ Hotstar will result in a mega entity with the largest subscriber base and the strongest distribution might.

Disney+ Hotstar’s around 40 million subscriber base is still the largest in the country, despite its loss of 20 million subscribers between September 2022 and June 2023 due to the Indian Premier League void. Taurani estimates the two OTT apps could together have 300-350 million Monthly Active Users (MAUs), which will challenge You Tube’s 470 million MAUs in India. Besides, JioCinema brings the distribution backing of group telecom firm Reliance Jio’s around 450 million subscribers.

“Most OTTs have not been able to scale up because of distribution challenges. They have always piggybacked on third party OEMs and telecom partners. But this will mean a gigantic entity with a large distribution chain. Eventually, it might even force other OTT platforms to go in for a tie-up with Reliance Jio or JioMobile,” said Taurani.

The potential deal has been necessitated as Disney is reportedly trying to hive off its Indian business amid a global cost restructuring operation. It initially seemed like the India business could either be sold or turned into a joint venture. However, no deal has been confirmed yet.