Dual mega mergers: their effect on the TV and advertising industries

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Jan 4, 2024

The year 2024 is poised to rewrite the narrative of the broadcast industry as two colossal mergers—Zee with Sony and Reliance-owned Viacom18 with Disney India—signal a potential duopoly that could redefine the landscape.

The Unfolding Drama

The Zee-Sony merger, despite facing delays and uncertainties, seems bound for fruition, while the unexpected alliance between Mukesh Ambani’s Reliance India and Walt Disney’s India arm through a 51:49 cash and stock non-binding agreement has sent shockwaves through the industry.

Insiders anticipate both mergers to wrap up in the first half of 2024. The process involves navigating multiple regulatory hurdles, including approvals from entities like the Income Tax Department, the Competition Commission of India, and the National Company Law Tribunal, underlining the complexity and scrutiny involved in such unions.

The Game-Changing Duopoly

Upon merging, Reliance-Disney is projected to claim a dominant 43% share of the TV ad market. If Zee-Sony merges, their anticipated share stands at 25%, essentially crafting a duopoly that promises a seismic shift in TV entertainment.

Disney Star boasts a significant portfolio comprising over 70 TV channels across eight languages, Disney+ Hotstar, and a film studio. Meanwhile, Viacom18, under Reliance, holds 38 TV channels across eight languages, Jio Cinema, and Viacom18 Studios. Their combined might would wield over 100 TV channels, two streaming platforms, and two film studios.

Financial Implications and Speculations

Speculations hint at a staggering $1.5 billion investment by the merged entities, granting Ambani's firm control over Star India's channel distribution. Operating revenues for FY23 for Disney Star and Viacom18 stood at Rs 19,857 crore and Rs 4,554 crore, respectively, accentuating the financial prowess of the merging giants.

Simultaneously, the $10 billion Zee-Sony merger foresees a conglomerate hosting 70+ TV channels, ZEE5, Sony LIV, and film studios, claiming a significant 26% market share. Operating revenues for Culver Max Entertainment Private Limited (formerly SPNI) and ZEEL for FY23 were Rs 6684.9 crore and Rs 8087.90 crore, respectively, highlighting the immense financial clout of both entities.

Beneficial Shift for the Advertising Industry

The emergence of these duopolies holds promising prospects for the advertising industry. With enhanced market shares, streamlined channels, and diverse content platforms, advertisers can access a larger and more diverse audience, potentially revolutionizing ad strategies and revenue models.

We are already witnessing a buzz in the advertising market. If you want to stay ahead and grab the best TV advertising deals, get in touch with Excellent Publicity.

For unparalleled marketing and advertising updates, trust Excellent Publicity to illuminate your brand journey.

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