Reliance-Disney media deal: Advertisers look forward to wider reach and content boom

Reliance Industries Limited’s Viacom18 has inked a binding agreement with the Walt Disney Company to merge their media operations in India and form a joint venture that will see the businesses of Viacom18 and Star India being combined. The deal has paved the way for a diverse media landscape in India bringing together a content library of over 108 channels, two OTT platforms and two film studios.

While some advertisers predict wider reach and content creation, others worry about potential price hikes and reduced negotiation power.

Shashank Srivastava, senior executive officer, marketing and sales at Maruti Suzuki India Limited expects cost synergies and broader reach for advertisers.

“Both Viacom and Star Disney are large in their own right and a merger of both could offer them substantial synergies on cost as well as reach . For advertisers this could mean less price negotiation position but with an added advantage of wider bouquet of channels,” he said.

However, according to Srivastava, much will depend on how digital asset capabilities are built up in the merged entity as digital is a large media investment area for advertisers.

The JV, according to a press statement, is also looking at leading the digital transformation of the media and entertainment industry in India and offer consumers high-quality and comprehensive content offerings anytime and anywhere.

Digital after all is the fastest growing segment in the overall media pie for AdEx.

According to GroupM India the overall ad revenue is expected to reach Rs1,55,386 crore in 2024 where digital will contribute to 57 percent of all ad revenue at Rs 88,502 crores. It is not just about digital though.

The JV will be one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment (e.g. Colors, StarPlus, StarGOLD) and sports (e.g. Star Sports and Sports18) including access to highly anticipated events across television and digital platforms through JioCinema and Hotstar. The JV will have over 750 million viewers across India and will also cater to the Indian diaspora across the world.

As Shubhranshu Singh, chief marketing officer at Tata Motors CVBU, points out that the development will lead to a revival in the overall content universe given the investment and likely synergies.

“It will bring closure to the TV versus digital market debate,” he said.

“Having a third of the market with one entity is a big development. Overall, from an advertiser’s perspective market forces ensure what you pay is what you get but in the short term it can be a case of ‘advantage seller!’. Ultimately audience aggregation will help accelerate and impactful brand building,” Singh added.