🤯 Reliance-Disney Star Merger Explained!
Why is Disney Star exploring a merger with Reliance? Read on.
Hey there.
Today, we've got a sizzling topic on our hands.
It's a tale of strategy, ambition and power.
A tale of two giants, merging into one.
Yes, you read it right.
Reliance and Disney Star, the giants of media entertainment are coming together to change how we consume content.
Grab your masala chai, and dive deeper into the biggest ever entertainment merger India might see!
Act I: Setting the Stage
On one side, you have Mukesh Ambani's JioCinema, owned by Reliance.
In 2023, it bagged the broadcasting rights for IPL for Rs. 23,758 crores for 2023-27.
And boy, did this pay off!
It recorded a staggering cumulative viewership of 550 crore for 17 matches!
And on the other side, there's Walt Disney's Disney Star.
Disney Star has the rights for major ICC events upto 2027.
And it's breaking records left, right and centre.
A peak TV audience of 13 crore watched the World Cup Final!
Clearly the most-watched Cricket World Cup game.
Now, this is where it gets interesting.
The two media giants, who are often competing with each other, have now decided to come together and take the centre stage.
After all, why compete when you can collaborate?
Reliance is set to acquire Disney Star’s India operations.
Reliance Industries, through Viacom18, will create a subsidiary to absorb a majority of Star India (51% and 41% ownership).
Act II: Behind the Scenes
Now, let's peek behind the curtain. Why this grand move?
Reliance's Masterstroke
Ambani is not just playing a game of acquisition; he's crafting an empire.
The IPL streaming rights, the HBO content deal – these weren't random moves.
They were stepping stones leading to this mega-deal.
By potentially adding Disney Star to its kitty, Reliance is revolutionize the media landscape in India.
Yep, another disruption.
Imagine the power of Disney's content combined with Reliance's distribution muscle.
A game changer, right?
Disney's Calculated Retreat
Disney isn't just handing over the keys to its kingdom.
No, this is a strategic pivot.
Disney seems to be realigning its focus, maybe to concentrate more on global strategies or emerging technologies.
Why, you ask?
Well, despite robust viewership, Disney Star India saw a decline in profit by 31% in FY23.
Its ad revenue also came down by 7.64% in FY23.
To improve this, Disney is undergoing a revival operation.
You see, Bob Iger came back to Disney as CEO in November 2022.
And he has been on a mission to transform Disney.
For starters, the company is now divided into three divisions:
Disney Entertainment
Sports (including ESPN)
Experiences and Products (including theme parks)
This will help teams focus better and streamline operations, potentially cutting down on expenses.
Iger wants to reduce costs by around $7.5 billion.
And well, he wants to focus more on something that competitors will take years to replicate: Disneyland!
Yes, Disney has announced a $60 Billion investment for Disney theme parks over the next decade.
So, this move seems like sacrificing a bishop to win the game.
Act III: Ripple Effects
Now, this move may or may not be a smart move.
But this merger could change the face of media and entertainment as we know it.
This merger could give birth to a new titan in the media world.
This merger could spell trouble for the existing players like Netflix and Amazon!
What does this mean for us viewers?
Well, for us, this could be the dawn of a new era in entertainment.
More content, better quality, innovative distribution – the possibilities are endless.
The Closing Curtain
Disney Star is valued at around $10 billion by Disney.
Reliance values it at $7 billion to $8 billion.
Where will they settle?
We'll have to wait and watch.
The two parties have already signed a non-binding term sheet for the merger.
So, we could see the new entity in action by as early as February 2024!
While we eagerly wait for this saga to unfold, here's a thought for you:
In this rush for market control, what happens to the diversity of content and the freedom of choice for viewers?
Is it right to give so much power to a few big players?
Let us know in the comments!
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