Disney and Sony Deals Raise Concerns for Accessing Indian Consumers


Two major media deals unfolding in India are causing apprehension among consumer goods giants like Unilever Plc and Procter & Gamble Co. The prospect of entertainment evolving into a duopoly, akin to the telecom sector, raises questions about the potential increased costs for large consumer brands to reach India’s vast population of 1.4 billion.

The first transaction, anticipated as early as Monday, involves Walt Disney Co. entering a non-bidding agreement with Mukesh Ambani to merge their media businesses in India. Mukesh Ambani, the wealthiest Asian tycoon, is expected to retain at least 51% control over the combined television and streaming operations.

The second deal, in the works for over two years, involves the potential merger of Sony Group Corp.’s local unit with Zee Entertainment Enterprises Ltd. However, disagreements regarding the choice of CEO have created uncertainties, and while the Sony-Zee accord faces doubts ahead of its December 21 deadline, it is anticipated that the Indian sports and general entertainment market will consolidate into two major platforms by next year: Ambani’s Viacom18 Media+Disney and Sony, with or without the Zee merger.

Currently, India boasts a substantial cable market, and TV ads remain five to six times more expensive than their digital counterparts. The consolidation of major networks – Disney, Zee, Sony, and Viacom18’s Colors – into two large platforms could reshape the advertising landscape. Viacom18+Disney, after a merger, would control a significant portion of Hindi general entertainment in northern Indian cities and more than a quarter of the Tamil market.

Mukesh Ambani’s influence would extend to the west and east coasts, capturing about a third of the country’s video-streaming subscribers and securing a dominant position in cricket broadcasting. With Ambani’s significant investments in cricket, media firms recognize the sport’s importance in controlling viewership, especially as the Indian government introduces regulatory measures affecting content across platforms.

Brands face potential challenges as Ambani, India’s largest retailer, aims to build a consumer-goods empire. While traditional distribution methods have been a formidable barrier, Ambani’s strengthened media empire could offer him a significant share of consumer spending in India’s projected $2 trillion retail market by 2032.

Comparisons are drawn to Ambani’s impact on the telecom industry, where his entry in 2016 reshaped the market into a duopoly dominated by Jio and Bharti Airtel. The fate of Zee’s merger with Sony remains uncertain, with potential implications for media consolidation in India. If the merger collapses, it may lead to a three-way race reminiscent of the telecom sector, with Ambani in the lead, a robust Sony, and a struggling Zee.

While the direct impact on consumers may not be immediately visible, the consolidation in the media industry could eventually raise the cost for brands competing directly with Ambani to convey their messages effectively.

Joseph Gutierrez

Joseph Gutierrez holds Master’s degree in Business Administration. As an avid day trader, he is a master of technical analysis and writes tirelessly on how stocks are trading. Joseph has extensive knowledge in technical analysis & news writing. He delivers news reports regarding Market category.

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