Merger musings

Every time Reliance Industries Ltd, or RIL, makes a move in the media business, you wonder why.

- VANITA KOHLI-KHANDEKAR

In 2012, it funded the merger of Network 18 (which also owns Viacom18) with Eenadu, a firm it already had. By 2014, it took management control of the resulting entity. In 2022, it brought the James Murdoch and Uday Shankar-owned Bodhi Tree in as an investor into Viacom18 and added JioCinema to the whole bundle. Last year, it bought the digital rights to the Indian Premier League and also licensed HBO's high-end programming. Late in February this year came the announcement of a merger between the (now) RIL and Bodhi Tree-owned Viacom18 and the Disney-owned Star India. Last week, it bought out the remaining stake that Paramount, the original partner in Viacom18, had in the company. The new merged entity is now completely owned by RIL and Bodhi Tree.

Therefore the question, why? Is it because media is a good investment?

It doesn't seem so. The ₹2.3 trillion (roughly $28 billion) Indian media and entertainment business is a tough place. It has huge volumes, poor per unit monetisation, low margins, and needs lots of effort and patience. It took Star India almost a decade to hit paydirt in the nineties. More than eight years after 100 per cent foreign direct investment was allowed in cable, not a single firm has come in. There are many such instances.

"Indian media and entertainment hasn't had a significant capital injection except for the money that Google, Meta, Netflix, Amazon have invested in the creative economy and distribution in recent years. RIL has invested $2.4 billion in the last couple of years and partnered with key groups," says Vivek Couto, executive director and co-founder, Media Partners Asia.