ANTI-MONOPOLY ACTION: RELIANCE-DISNEY GET AWAY

FTER some initial hiccups, the Competition Commission of India (CCI) has given interim approval to the merger of two entertainment and media behemoths – Disney India and the Reliance-controlledViacom18.

- GURBIR SINGH

The merged entity will be a $8.5 billion powerhouse, dwarfing all others. With about 120 broadcasting channels, a reach of 750 million people worldwide, cornering a combined revenue of 43% of the advertising market, and with two of the largest streaming platforms – Jio Cinema and Disney + Hotstar – what we are seeing is an outsized media monopoly.

Analysts have been speculating the entertainment market will be reduced to a duopoly – or a ‘trio-poly’ if you take Zee Entertainment Enterprises and Sony Television as two standalone groups. This is wishful thinking. Zee plus Sony won’t be half the size of the RelianceViacom-Disney juggernaut. What we have on the horizon is an undisputed monopoly.

The domination will have a serious impact on consumers: for advertisers, airtime rates will be fixed; and media consumers will have to pay more for access to live cricket and other content.

There is little forthright questioning, but one can sense the nervousness in the industry. The CCI had initially stalled the merger; and, according to a Reuters report, had raised some key concerns:

In sports broadcasting the two companies – Disney with 77.7% share and Reliance Viacom 7.5% - together had cornered a combined share of 85.2%. “The sports TV channel segment is already highly concentrated,” the CCI said in its letter. “Most of the current sports content such as cricket ... are streamed on either of the two platforms (of Reliance and Disney)”. This meant “higher negotiating power …”.

The CCI said it found that Disney and Reliance are “close competitors….After the merger, there may not be an adequate number of competitors ... for advertisers.”