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Q: While I understand the finer details are not yet known, and we must wait for all regulatory clearances to come in first, but what is your spontaneous reaction to the Reliance/Viacom-Disney-Star merger?
A: I think no comment is required (not because it’s too early to evaluate) on the subject. Let’s just look at some facts as a consequence of this merger:
I think the merger of Viacom18 and Star India will have a big impact on the entire M&E ecosystem as the combined entity will command a huge market share. The merger will create a large media house with 108+ channels (Star India has 70+ TV channels in eight languages whereas Viacom has 38 TV channels in eight languages), two large OTT apps (Jio Cinema and Hotstar) and two film studios (one each of Reliance and Disney India). There is a large market opportunity for the merged company, as India’s M&E market for print, TV and digital is at USD18bn in CY22, poised to post a CAGR of 8.2% over CY22-25 (Source: EY FICCI).
Post the merger, the combined entity will command a TV advertisement/TV subscription (excluding distributors/DTH/MSO revenue)/Total TV market share of 40%/44%/42% (as of FY23) respectively.
This dominance is expected to create a huge pressure on other linear GEC channels who have to take rear guard action to counter market challenges at both SVOD and AVOD level.
Will this virtual plutocracy be good or bad for the consumers? One can argue till the cows come home for a definitive answer. Consumers would be happy if they get to exercise their discretionary power on the basis of quality content and affordable price.
Anyway, it’s too early to predict if the merged entity would follow a consumer-desired policy. After all, the dil always maange more for consumers (Indian consumers are known for it) and business has to take into account its commercial viability.
Anyway, oligopoly, plutocracy et al are good for the shareholders and perhaps good for the economy, however imperfect the competition might be.