Among the financial results and several announcements made for the second quarter by Reliance Industries (RIL) on Wednesday, comes its expected takeover of two of the largest national cable TV networks. Pumping in investments of over Rs 5,000 crore, RIL has acquired controlling stakes of 66 per cent in Den Networks Ltd (DEN) and 51 per cent in Hathway Cable, one of the earliest players in cable delivery of TV channels in India. This acquisition will make Jio the largest player in the digital cable market with a share of around 25 per cent, ahead of old players such as Siti Cable.
This is a playout of what RIL chairman Mukesh Ambani describes as ‘connecting everyone and everything, everywhere.’ The 20 million subscribers Reliance has acquired provide distribution heft to content generated by multiple cable TV channels in the Reliance fold. Viacom18, in which Reliance has a controlling stake, has a slew of entertainment channels under the Colors brand and over-the-top network Voot. These will now find their way into more TVs through DEN and Hathway. Further, Jio’s broadband network—the main revenue driver—now has a readymade market. Of the 20 million estimated customers of Hathway and DEN who watch their TV programs on cable, only one million are broadband subscribers. Jio will now hook them on its broadband network.
On the flip side, is a worrisome monopoly developing and threatening to snuff out competition? Jio is not just enlarging its telecom footprint. It is also generating and distributing entertainment and news content through these networks and integrating and upgrading the old TV cable networks into a mighty delivery system. ‘Predatory’ pricing, like in telecom where it is edging out Airtel and Vodafone, can be repeated in the broadcast TV and cable industry. And in news. Once it has a monopoly, two problems will arise—first, subscription costs will rise dramatically; two, entertainment and news content will be sans variety and independence. We have to guard against this trend.