29 December 2023

If the merger goes ahead, Reliance is poised to become India's leading video streaming provider, boasting approximately one-third of the nation's video streaming subscribers, surpassing competitors like Netflix and Amazon. However, the high-profile nature of the deal raises concerns about potential scrutiny from anti-competitive regulatory bodies.

The competition for market share has resulted in streaming platforms providing premium sports content free of charge, impacting market dynamics and profitability due to the substantial expenses associated with acquiring media rights for sporting events. The planned merger would thus grant Reliance entry to significant sporting events currently broadcasted by Disney like the International Cricket Council tournament and the English Premier League. This could potentially reshape the landscape of sports content distribution in the industry.

The agreement holds the potential to assist Disney in retaining subscribers, leveraging Reliance's robust strategy for acquiring sports and entertainment content. Disney India witnessed a significant decline in its subscriber base, experiencing a 39% year-over-year drop to 37.6 million in September 2023. This decline was chiefly attributed to the loss of streaming rights for the Indian Premier League (IPL) cricket tournament and the decision not to renew its content partnership with HBO. The proposed merger could act as a strategic countermeasure, enabling Disney to fortify its content portfolio and regain lost ground in the competitive streaming landscape.

Reliance Industries and Walt Disney have engaged in discussions regarding the potential merger of their Indian entertainment businesses. However, the companies have not reached a comprehensive agreement on structures or valuations.