In an increasingly competitive but expanding Indian streaming market, both Disney and Reliance have a lot to gain from the deal, which allows them a chance to consolidate their pole position.
But experts warn that it may also mean a potential drop in the business earnings of smaller players.
“The Indian market values bundling and is price-sensitive. [Subscribing to] this combined entity can offer a comprehensive package including [access to] web series, movies, sports, original content, and a global catalogue,” says Mr Taurani.
And if the combined company can also leverage the large telecom subscriber base of Reliance Jio, other streaming companies may find it hard to raise prices, he adds.
The Reliance Group has a tried-and-tested business strategy that has allowed it to thrive in the price-sensitive Indian market: it offered cheap mobile data when it launched Jio in 2016, and its JioCinema streaming subscription is available for as little as 29 rupees ($0.35; $0.26) a month.
From this deal too, Reliance chairman Mukesh Ambani has promised “unparalleled content at affordable prices”.
“Other streaming platforms will be worried about the cost of content and the cost of programming. Will they be forced to drop prices?” says media and entertainment industry specialist Vanita Kohli-Khandekar. She says that the Reliance strategy of offering things at throwaway prices usually “destroys value” for competitors.
Streaming competitors might be easier to handle but the new company will also face stiff challenge from other rivals with deep pockets, such as Google, Meta and Amazon, who have been trying to expand in India.
These global tech giants have “played a pivotal role in expanding India’s video market, now estimated to be worth $8.8bn in revenue for content owners”, according to a report by research firm Media Partners Asia. In 2022-23, Google’s YouTube alone had an 88% share in India’s premium video-on-demand (VOD) market.
So the new Reliance-Disney behemoth will hope to dominate not just news, movies and sports, but also redirect digital advertising revenues from these big firms to its own coffers.
“Now, it’s an even fight,” says Ms Kohli-Khandekar. “Some 80% of digital revenues go to Google and Meta, so you have to have scale, and finally, you have a company that can take on some of the large global majors operating in India.”
But she warns that while the new entity might have scale and heft, it will also need to deliver quality with quantity – if, for instance, the streaming market becomes more dependent on views rather than subscriptions, “programming quality will be good only on one or two apps”, she says.
“That is something I would watch out for.”
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