In Reliance-Disney merger, how Star shines over Viacom18

New Delhi: As the media arm of Reliance Industries merges its operations with the Indian business of The Walt Disney within a couple of months, the staff at both companies remain clueless about their future.

While there may be a number of job losses for the roles that are directly overlapping between Viacom18 and Disney Star India, the employees on either side are mentally preparing to be a part of Star India.

On August 30, the NCLT approved the scheme of merger of Viacom18 Media and Digital 18 Media, holding media and entertainment assets of Reliance Industries with Star India.

The scheme had proposed the transfer and vesting of Media Operations Undertaking from Viacom18 and JioCinema into Digital18, which is a subsidiary of Viacom18. This would be followed by "demerger, transfer and vesting of V18 Undertaking from Digital18 into Star India".

The merger of the media assets of Reliance Industries and The Walt Disney Co.'s India business will create the country's largest media empire worth over Rs 70,000 crore.

This merger will also see Viacom18 merging into Star India after 27 years of its existence. 

“The manner in which Viacom18 gave way to Star India followed by the decision to move live sports to Hotstar, chances are strong that the Disney staff will have an upper hand when it comes to overlap,” said an industry observer.

Among the merger of business assets, all eyes are on the way forward for the two OTT apps – JioCinema and Disney+ Hotstar.

A report from Reuters confirmed last week that JioCinema will make way for Hotstar owing to the better capabilities of the latter.

The report, quoting multiple sources, said that all live sporting events, including IPL, will only be available on Disney's Hotstar app.

JioCinema has the rights to IPL cricket, a money-spinner and among the most-streamed content, as well as to the Winter Olympics and Indian Super League football.

Hotstar has rights to the International Cricket Council's tournaments in India, English Premier League soccer, and the domestic Pro Kabaddi League.

Quoting sources, Reuters said that Hotstar head Sajith Sivanandan held a town hall last week to tell staff of the decision to switch live sports streams from Reliance's app.

Hotstar is reportedly aiming to complete the transition by January.

However, there is no clarity on whether JioCinema will continue to exist with entertainment content or everything will merge into one app. It is also not clear whether the Hotstar app will be rebranded.

Earlier on September 27, the government approved the transfer licenses relating to non-news current affairs TV channels held by media entities of Reliance Industries to Star India.

It may be recalled that the CCI had last month cleared the "proposed combination involving Reliance Industries, Viacom18 Media Pvt Ltd, Digital18 Media, Star India and Star Television Productions, subject to the compliance of voluntary modifications”.

The CCI, however, did not disclose voluntary modifications in the original deal made by the two parties.

As per the deal, Mukesh Ambani-led RIL and its affiliates will hold 63.16% of the combined entity that will house two streaming services and 120 television channels.

Walt Disney will hold the remaining 36.84% stake in the combined entity, which will also be India's largest media house.

Reliance Industries has also agreed to invest close to Rs 11,500 crore into the joint venture to give it the muscle to fight rivals like Japan's Sony and Netflix.

Nita Ambani, wife of billionaire and RIL Chairman Mukesh Ambani, will head the joint venture, while Uday Shankar will be the vice-chairperson.