The crowded and somewhat vibrant media and entertainment industry in India is cleaning out with a spate of mergers. What’s emerging are just 3-4 large players after the exit of many of the big media conglomerates like NewsCorp (Star TV) and Viacom. Unhappily, the consolidation is in news media too, leaving a narrower choice for the discerning news junkie.
A few days ago, the Adani group created ripples when its media company AMG Media Networks acquired 50.5% stake in the new agency Indo-Asian News Service (IANS). The agency, launched in 1986 by the India-American publisher Gopal Raju, was earlier christened the India Abroad News Service, and made a mark in distribution of ‘sub-continent’ news in international markets.
The acquisition displays the long-term play of billionaire entrepreneur Gautam Adani. Exactly a year ago, in December, the Adani Group through a subsidiary, acquired just over 27% of NDTV’s shares from the original promoters – Prannoy and Radhika Roy for about Rs 600 crore, completing a long-rankling, hostile takeover. Some saw it as a one-off by Adani to quell a critical voice in the news arena.
But it was not a one-off. Earlier, in November 2022, the Adani Group completed a two-part acquisition of the Raghav Behl-promoted Quintillion Business Media that gave it control over several digital properties like ‘The Quint’.
Then there was the big buzz on a possible acquisition of the Times Group (Bennett, Coleman & Co). But then along came the Hindenburg Research report on 24 January which changed many an acquisition plan. With the IANS takeover now, is it a signal that Adani is media hunter once again?
Two big mergers
Over the last few weeks, the outlines of a much bigger merger has been cropping up. Walt Disney Company, which hasn’t exactly rocketed into the stratosphere after it took over Star TV from NewsCorp in 2019, has been in talks with Reliance for a merger, and then a possible exit from India.
The move could rocket Reliance, which has a controlling stake over the entertainment group Viacom18, and news business TV18, to an unassailable No.1 spot. However, red flags have been raised about the deal. A merged entity with 120 TV channels, along with two aggressive streaming services – Jio Cinema and Disney Hotstar, who hold most of the digital cricketing rights in India – will become a monopoly controlling both eyeballs and the advertising market. It is to be seen if the lumbering Competition Commission (CCI) will step in.
The other piece of merger jigsaw that is still to fall in place is the Zee-Sony deal. About two years ago, the two behemoths signed up for an arrangement that would create a $10 billion entity with Sony and Zee promoters holding 51% and 4%, respectively. The combined powerhouse will have 70 TV channels on air, as well as two fairly successful streaming services – Zee5 and SonyLIV.
However, the merger has been lurching from one crisis to another. First, it was a friendly investor, Invesco, who turned rogue and almost bagged Zee in a hostile takeover.. After that, SEBI moved in and barred Zee’s chief, Punit Goenka, from holding directorships in any of the listed companies. A tribunal, in appeal, has stayed the ban. The merger has also been approved by the Competition Commission.
In the meanwhile, the two parties Sony and Zee, have run out of time. The merger was to have been completed by 21 December. They now have a grace period of just one-month to see it through. While external issues seem to be settled, they have to contend with their bilateral angst. The two are believed to be at loggerheads on the nature of the post-merger leadership team. However, seeing the stakes involved and the effort that is gone in, it is likely the merger will muddle its way through.
Killing creativity
What we have seen through over two decades of the media and entertainment industry is a continuing consolidation. Smaller players like the Anil Ambani ADAG Group, Ronnie Screwalla’s UTV and others have either folded up or merged with larger players to make it a four-cornered market – Walt Disney, Zee Entertainment, Viacom-Reliance and Sony. It will now whittle down to a duopoly – Reliance-Disney and Sony-Zee.
This will be a blow to variety and depth of entertainment content, which flowered at the turn of the century. It was a period when DTH and satellite TV was first opening up; and TV channels multiplied and were willing to experiment with differentiated content. Result: Audiences are moving in droves to OTT and streaming content. Besides the biggies, Amazon, Netflix et al, there are the smaller players too catering to the demand for variety and disruptive content.
It proves the adage ‘Content is King’ will always be true. It works in news too. NDTV under Prannoy Roy did not have a huge following, but it had a discerning,‘intelligent’ following. The new owners may have bought the network, but it does not mean the eyeballs came along with the package.The media monitoring site Newslaundry reported that after the Adani takeover, viewership of Hindi NDTV India fell by more than half from 98 million views in December as compared to 45 million in the earlier month of November.