MUMBAI – A merger of India’s Zee and a domestic unit of Japan’s Sony Group Corp will create a television powerhouse to grab more advertising revenue, challenging top rival Walt Disney Co in a key growth market, said industry officials.
The Sony-Zee alliance, with about 75 news, entertainment, sports and movie channels in more than 10 languages, stands to become India’s biggest player with a market share of 27%, outstripping that of Disney’s Star India (24%).
“This will give them significant distribution muscle and an ad wallet,” Uday Sodhi, a former Sony Digital head in India, told Reuters.
“They will become a formidable force.”
Wednesday’s plan, to be finalised over 90 days of exclusive talks, will see Sony pumping growth capital to the tune of US$1.6 billion (RM6.7 billion) into its domestic unit to boost the prospects of the combined firm, while taking a majority stake in Zee.
The Sony funds will enhance the combined company’s digital platforms and its ability to bid on broadcasting rights in the fast-growing sports landscape, said the two firms.
“For the first time, there’s a viable challenge to Disney (in India),” said a former Disney executive, who sought anonymity as he is not authorised to speak to the media about the company.
Disney, whose Star India network has dozens of popular entertainment and sports channels, did not respond to a request for comment from Reuters.
Sony and Zee have operated for years in India, where accountant firm KPMG estimated the TV entertainment industry to be worth US$10.5 billion last year.
The proposed deal aims to unite their networks, digital assets, production operations and programme libraries, said the firms.
India, with a population of 1.4 billion, promises eyeballs on a scale that few nations can offer: 900 million TV viewers, most of whom are crazy about cricket and other sports, as well as melodramatic romance dramas.
Sports are a critical battleground, said the executives.
The merged combination will have better prospects to lure strategic investors or raise funds to bid on the rights to major events, such as the Indian Premier League (IPL) cricket tournament, said the former Disney executive and three others.
Disney’s Star India won the rights to the country’s international and domestic cricket matches from 2018 to 2023 for US$946.75 million, and paid US$2.22 billion to bag the worldwide IPL rights for five years until 2022.
Some of those rights come up for bidding next year.
Both Sony and Zee also have online digital streaming platforms that will take on the Disney+ Hotstar service, further ratcheting up competition in a market where Netflix and Amazon operate as well. – Reuters, September 26, 2021
