Reliance, the conglomerate led by Mukesh Ambani, is reportedly close to sealing a deal to acquire Disney’s India business. This move comes as Reliance aims to expand its digital and television assets, adding to its diverse portfolio that spans oil and telecom.
Key Takeaway
Reliance is reportedly in the final stages of acquiring Disney’s India business. This move aligns with Reliance’s strategy to expand its digital and television assets. Hotstar, Disney’s streaming platform, has faced significant competition from Reliance’s JioCinema, leading to a decline in subscribers.
The valuation of Disney’s India business is said to be around $10 billion, while Reliance views the assets at the lower range of $7 billion to $8 billion, according to a Bloomberg News report published on Monday. The deal is expected to be finalized and announced as early as next month.
Reliance’s Pursuit of Acquisitions
Reliance has a history of actively evaluating properties for potential acquisitions. This move aligns with the company’s strategy of expanding its presence in the digital and entertainment space, in addition to its existing ventures in telecom, oil, and other industries.
The Impact of Disney’s Previous Acquisition in India
In 2019, Disney made a significant acquisition by purchasing 21st Century Fox’s entertainment assets for $71.3 billion. This deal included the inclusion of Star India, which was instrumental in Disney’s global streaming expansion.
Through the acquisition, Disney gained broadcasting and streaming rights to the Indian Premier League cricket matches, a diverse range of multilingual TV channels, and an interest in a Bollywood film production company. Disney’s streaming platform, Hotstar, also saw a surge in monthly active users, reaching about 150 million at the time of acquisition.
Reliance’s Emergence as a Competitor
Hotstar dominated the Indian video streaming landscape for some time. However, the popularity of Reliance-backed Viacom18 has grown, particularly after securing the rights to stream IPL cricket matches for a hefty sum of $3 billion over five years. Disney also paid the same amount for the broadcasting rights of IPL matches on TV.
To bolster its on-demand streaming service, JioCinema, Reliance has attracted top leaders and engineering talent over the past year. The platform now offers premium content from HBO and NBC to its subscribers, positioning it as a major competitor to Hotstar.
The Battle for Viewership
As a result of Reliance’s aggressive entry into the streaming market, Hotstar has experienced a decline in subscribers. Approximately 20 million users have migrated to JioCinema to watch IPL matches, impacting Hotstar’s user base.
To counter this trend, Hotstar is currently streaming the ongoing cricket World Cup to mobile viewers free of charge, aiming to win back customers. It recently broke the global on-demand video streaming record with 35 million concurrent viewers during a cricket match. During a game between India and New Zealand, the concurrent viewership peaked at 43 million, surpassing its own record.
