In a bid to address the hurdles facing its streaming business in India, Disney has forged an alliance with Mukesh Ambani’s Reliance Industries, the wealthiest individual in Asia. The conglomerate unveiled plans to merge its Star India service with Viacom18, a venture supported by Reliance, in an agreement valued at $8.5 billion.
Under the arrangement, Reliance will take the helm of the combined entity, positioning it as a formidable player in India’s media landscape. With Reliance committing $1.4 billion to fuel expansion, Ambani hailed the partnership as a groundbreaking milestone for the Indian entertainment industry.
The completion of the deal, subject to regulatory approval, is expected by the end of the current year or early in the following year. The merged entity is anticipated to wield over 120 channels, catering to an estimated 750 million viewers across the nation.
Viacom18, established in 2007 through a collaboration between Reliance and Paramount, manages approximately 40 channels, including prominent names like MTV, Nickelodeon, Colours, and the JioCinema streaming service. This move presents a formidable challenge to Disney’s Star business in India, which came under Disney’s ownership as part of the acquisition of a segment of Rupert Murdoch’s Fox empire in 2019.
Reliance’s successful bid for streaming rights to the India Premier League cricket tournament in 2022 precipitated a decline in subscribers for Disney’s Hotstar service, marking a significant competitive event. Disney CEO Bob Iger highlighted the strategic benefits of the partnership, emphasising Reliance’s profound market insights.
Despite its strategic importance, Reuters sources suggest that the deal valued Star India at less than one-third of its 2019 valuation when Disney acquired the business. Disney will hold a 37% stake in the joint venture, while Viacom18 and Reliance will own 47% and 16%, respectively.
India’s streaming landscape has emerged as a crucial battleground, attracting substantial investments from global players such as Netflix and Amazon keen on tapping into its rapidly expanding market. Nita Ambani, Mukesh Ambani’s spouse, is set to assume the role of chairperson in the new venture, underscoring the significance of the collaboration.
