These media giants have entered into a landmark joint venture

India's leading media heavyweights come together for a strategic collaboration

Reliance, Viacom18 & Disney $8.5B JV: New era for Indian media

On February 29, 2024, Reliance Industries Limited (RIL), Viacom 18 Media Private Limited and The Walt Disney Company announced a groundbreaking joint venture (JV) to bring together Viacom18 and Star India. Reliance Industries will invest Rs 11,500 crore in the JV, which is expected to be valued at Rs 70,352 crore (around $8.5 billion). The transaction will be completed by the third or fourth quarter of FY25.

Reliance Industries will hold a 16.3 per cent stake in this JV, while Viacom18 and Disney (the parent company of Star India) will hold a 46.8 per cent and 36.8 per cent stake, respectively. Since Reliance Industries already owns and manages Viacom18 through TV18, it will be the controller of this JV.

Reasons behind the move

Disney and Reliance are expected to benefit from this JV, with the former boasting a vast content library and the latter having a better understanding of the Indian markets. Further, this venture is expected to grant Viacom18 and Star India exclusive rights to distribute Disney films and productions in India.

Following the announcement, Mr Mukesh D Ambani, Chairman & Managing Director of Reliance said, "This is a landmark agreement that heralds a new era in the Indian entertainment industry. We have always respected Disney as the best media group globally and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group."

How should investors view this move?

The collaboration between Star India and Viacom 18, backed by industry behemoths like Reliance and Disney, is expected to create a powerhouse that will produce unmatched content.

Further, the failure of the Sony-Zee merger and the prevailing competition in the market will make this JV the largest media and entertainment player in India, with a viewership base of more than 75 crore. It is also expected to cater to global users of Indian content.

This move can allow Reliance to reach a wider audience, providing them with strategic insights into consumer preferences and trends.

While it is a positive step, investors need to understand the economics of the media industry, which is known to generate inconsistent profits. The success of this JV will only be visible when it generates sufficient profits and cash flows to be able to sustain on its own.

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