Entertainment duopoly would be anti-competition
The entertainment industry is aflutter with speculation that the Reliance Group is close to buying out Disney India. The implication of such a merger would be huge as it would reduce India’s $40-billion entertainment and media industry to a duopoly. Walt Disney acquired Rupert Murdoch’s 21st Century Fox internationally in December 2017, paving the way for the merger of Star TV with Disney India. The assets included over 70 TV channels, streaming platform Disney+ Hotstar and film studios. Reliance has Viacom18’s 38 TV channels and owns the streaming service Jio Cinema. Together, Reliance and Disney would have an iron grip on the market. On the other hand, two other behemoths—Zee Entertainment and Sony TV, who together control about a quarter of the market—are also close to a merger. While this consolidation into a two-horse race might make business sense, it is a matter of concern as it would shut the door on smaller players.
Disney’s latest move also puts the spotlight on the bumpy ride US entertainment giants have been having. Disney came to India in 1993 but remained a slow starter with a few kids’ channels. Wanting heft through acquisitions, Disney bought Indian production house UTV in 2011. It also tried its hand at locally produced animation and feature films such as Roadside Romeo and Jagga Jasoos. Almost all its films flopped. Disney’s sports conglomerate ESPN also changed hands somewhere along the way. Disney’s localisation strategy for India has not worked and now the company seems to be completing a full circle with a possible exit three decades after it entered. Disney is not the only one who has had its fingers burnt.
Giant Viacom, which has been in the Indian market for over two decades with channels such as Colors and streaming platform Voot, has gradually exited, selling off a controlling stake of over 60 per cent to Reliance. Warner Brothers followed the same trajectory after losing money in its film studios. India is a huge but complex entertainment market. Not all the big guns have failed. Star with the show KBC and its saas-bahu series showed the success of localisation. However, it is our homegrown producers such as Yash Raj Films or Karan Johar’s Dharma Productions who have done substantially better. The new level of consolidation where everything might be under the Reliance or Zee-Sony roofs would be anti-competition; the government and the Competition Commission perhaps need to take a close look at what is brewing.