Reliance and Disney Form $8.5 Bn JV to Merge Respective Digital Streaming and TV Assets in India

Reliance and Disney Announce Strategic Joint Venture to Bring Together the Most Compelling and Engaging Entertainment Brands in India

• Companies to merge respective digital streaming and television assets in India to create a world class leader across entertainment and sports
• Reliance to invest ₹11,500 crore in the Joint Venture Disney to provide Content License to the Joint Venture

Reliance Industries Limited (“RIL”), Viacom 18 Media Private Limited (“Viacom18”) and The Walt Disney Company (NYSE:DIS) (“Disney”), on Wednesday, announced the signing of binding definitive agreements to form a joint venture (“JV”) that will combine the businesses of Viacom18 and Star India. As part of the transaction, the media undertaking of Viacom18 will be merged into Star India Private Limited (“SIPL”) through a court- approved scheme of arrangement.

In addition, RIL has agreed to invest at closing ₹11,500 crore (~US$ 1.4 billion) into the JV for its growth strategy. The post-money basis transaction values the JV at Rs 70,352 crore ($8.5 billion), not including any synergies.

The transaction values the JV at ₹70,352 crore (~US$ 8.5 billion) on a post-money basis, excluding synergies. Post completion of the above steps, the JV will be controlled by RIL and owned 16.34% by RIL, 46.82% by Viacom18 and 36.84% by Disney.

Disney may also contribute certain additional media assets to the JV, subject to regulatory and third-party approvals.

Mrs. Nita M. Ambani will be the Chairperson of the JV, with Mr. Uday Shankar as Vice Chairperson providing strategic guidance to the JV.

The JV will be one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment (e.g. Colors, StarPlus, StarGOLD) and sports (e.g. Star Sports and Sports18) including access to highly anticipated events across television and digital platforms through JioCinema and Hotstar. The JV will have over 750 million viewers across India and will also cater to the Indian diaspora across the world. 

The JV will seek to lead the digital transformation of the media and entertainment industry in India and offer consumers high-quality and comprehensive content offerings anytime and anywhere. The combination of the media expertise, cutting-edge technology and diverse content libraries of Viacom18 and Star India will allow the JV to offer more appealing domestic and global entertainment content and sports livestreaming services, while delivering an innovative and convenient digital entertainment experience at affordable prices. With the addition of Disney’s acclaimed films and shows to Viacom18’s renowned productions and sports offerings, the JV will offer a compelling, accessible and novel digital-focused entertainment experience to people in India and the Indian diaspora globally.

The JV will also be granted exclusive rights to distribute Disney films and productions in India, with a license to more than 30,000 Disney content assets, providing a full suite of entertainment options for the Indian consumer.

Speaking about the JV, Mr. Mukesh D Ambani, Chairman & Managing Director of Reliance Industries, said, “This is a landmark agreement that heralds a new era in the Indian entertainment industry. We have always respected Disney as the best media group globally and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group.”

Mr. Bob Iger, CEO of The Walt Disney Company, said, “India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long- term value for the company. Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content.”

Mr. Uday Shankar, Co-founder of Bodhi Tree Systems, said, “We are privileged to be enhancing our relationship with Reliance to now also include Disney, a global leader in media & entertainment. All of us are committed to delivering exceptional value to our audiences, advertisers, and partners. This joint venture is poised to shape the future of entertainment in India and accelerate the Hon’ble Prime Minister’s vision of making Digital India a global exemplar.”

The transaction is subject to regulatory, shareholder and other customary approvals and is expected to be completed in the last quarter of Calendar Year 2024 or first quarter of Calendar Year 2025.

Goldman Sachs is acting as financial and valuation advisor and Skadden, Arps, Slate, Meagher & Flom LLP, Khaitan & Co and Shardul Amarchand Mangaldas & Co are acting as legal counsels to RIL and Viacom18 on the transaction. Ernst & Young has provided an independent valuation to RIL and Viacom18, while HSBC India acting as financial advisor has provided a Fairness Opinion to Viacom18.

The Raine Group is acting as lead financial advisor to Disney on the transaction. Citi is acting as a financial advisor to Disney. Cleary Gottlieb served as lead outside counsel to Disney and Covington & Burling and AZB served as legal counsels to Disney on the transaction. BDO has provided an independent valuation to SIPL. 

About Reliance Industries Limited

Reliance is India’s largest private sector company, with a consolidated revenue of Rs 9,74,864 crore (US$118.6 billion), cash profit Rs 1,25,951 crore (US$ 15.3 billion) and net profit of Rs 73,670 crore (US$9.0 billion) for the year ended March 31, 2023. Reliance’s activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, advanced materials and composites, renewables (solar and hydrogen), retail and digital services.

Currently ranked 88th, Reliance is the largest private sector company from India to be featured in Fortune’s Global 500 list of ‘World’s Largest Companies’ for 2023. The company stands 45th in the Forbes Global 2000 rankings of 'World’s Largest Public Companies' for 2023, the highest among Indian companies. Reliance is the top-ranked Indian company and the only one in the top 100 on Forbes' 'World's Best Employers' 2023 list. Additionally, it is featured among LinkedIn’s 'Top Companies 2023: The 25 Best Workplaces To Grow Your Career In India."

About Viacom 18 Media Private Limited

Viacom18 Media Pvt. Ltd. is one of India’s fastest growing entertainment networks and a house of iconic brands that offers multi-platform, multi-generational and multicultural brand experiences. Viacom18 defines entertainment in India by touching the lives of people through its properties on air, online, on ground, in cinemas and merchandise. Its portfolio of 40 channels across general entertainment, movies, sports, youth, music and kids genres delights the consumers across the country with its eclectic mix of programming. JioCinema, Viacom18’s OTT platform, is one of India’s leading streaming services and most popular destination for live sports. Viacom18 Studios has successfully produced and distributed iconic Hindi films and clutter-breaking regional films for over 13 years in India.

About The Walt Disney Company

The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international entertainment and media enterprise that includes three core business segments: Entertainment, Sports and Experiences. Disney is a Dow 30 company and had annual revenues of $88.89 billion in its Fiscal Year 2023.

About Star India

With a television network that reaches more than 700 million viewers in nine different languages every month and a streaming platform (Disney+ Hotstar) that has transformed the way India consumes entertainment, Disney Star is a leading media & entertainment company in the country. The organization’s entertainment portfolio, which generates more than 20,000 hours of original content every year, cuts across general entertainment, sports, films, infotainment, kids and lifestyle content. With leadership positions in every segment it occupies, Disney Star has been redefining the media landscape for more than 30 years now, anchored on the three pillars of storytelling, innovation and an unwavering focus on delivering to the expectations of our audiences.

About Bodhi Tree Systems

Bodhi Tree Systems is a strategic investor in consumer technology opportunities in Southeast Asia, with a particular focus on India. The entity is a platform of James Murdoch's Lupa Systems and Uday Shankar and was established in 2021 to explore and invest in Southeast Asia and the Middle East. In addition to media, Bodhi Tree expects to invest in other consumer technology sectors that represent significant opportunities but suffer from a lack of capital and innovation – including healthcare and education. Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar, is an investor in Bodhi Tree Systems.

Reliance Industries' Viacom18 to Create Shows for Netflix in India

American video streaming and production company Netflix is in talks with Viacom18, part of the Indian conglomerate Reliance Industries’ media unit Network18, about a multi-year partnership to source content, said a report of Reuters, citing its three sources.

According to the report, Viacom18 would create shows for Netflix to help the US firm expand offerings in India. Citing its sources, the Reuters report said that "The scale of Netflix's ambition and aspiration in India is quite high and the deal could involve at least 10 shows, mainly in Hindi.

A Netflix spokesman in India however denied that the company was in talks with Network18 or Viacom18, but did not elaborate. A spokeswoman for Viacom18 declined to comment on whether any talks were under way, said the report.

The report, citing two of the sources, further said that Some Reliance executives are involved in the Netflix negotiations.

Launched 4-years ago in India, Netflix competes against the video streaming services of Amazon's Prime Walt Disney Co.'s "Disney+ Hotstar" and others local players.

Speaking about Mukesh Ambani-led Reliance Industries, in recent weeks, the conglomerate has secured nearly $13 billion in investments from Facebook Inc, KKR & Co and other investors into its digital unit Jio Platforms, which houses movie and music apps, and a telecoms venture. In the month of May, Reliance’s Jio Platforms raised $4.6 Billion, which’s 85% of All PE/VC Investment in India, according a report by IVCA-EY.

In April this year, Netflix introduced new parental controls in India, including a PIN protect feature to prevent kids from accessing specific profiles. The new features were introduced at a time when people across the globe are spending more time indoors as part of efforts to contain the spread of the deadly coronavirus that has claimed thousands of lives globally.

The new features are beroduced at a time when people across the globe are spending more time indoors as part of efforts to contain the spread of the deadly coronavirus that has claimed thousands of lives globally.

To recall, Netflix along with Disney's Hotstar announced plans in early 2019 to adopt self-regulation guidelines for content streamed on their platforms within India, in an effort to prevent potential implementation of government censorship laws.

Netflix CEO Reed Hastings said in December the company planned to invest nearly $400 million (Rs 3,000 Crore) during 2019 and 2020 to develop content for Indian viewers. Netflix is looking to develop premium content in India and distribute it globally, Hastings said.

 

Viacom18 Launches its Digital VOD Platform VOOT

[caption id="attachment_104480" align="alignnone" width="700"] Sudhanshu Vats, Group CEO - Viacom18 & Gaurav Gandhi, COO - Viacom18 Digital Ventures[/caption]

Viacom18, one of India’s growing media and entertainment companies, has launched its digital VOD platform VOOT. VOOT will be an advertising led VOD platform and will be available for free on iOS, Android and web.

In a major move aimed at curating the largest repository of kids’ characters in the Indian OTT space, VOOT will house popular characters from across networks - from Nick characters like Dora, Spongebob, Motu Patlu to external popular characters like Chhota Bheem and Pokemon. In another first for an Indian OTT player, VOOT has launched with the repository of original content. VOOT Originals will roll out shows in both long and short formats across genres like comedy and drama. Furthermore, Viacom18 will move its entire content library, including COLORS, MTV and Nick, to be digitally available only on VOOT.

Commenting on the launch, Sudhanshu Vats, Group CEO, Viacom18, said, “India is at the cusp of a digital boom with over 400 million internet users and  200 million+ smart phone users spending significant amount of time online with entertainment and allied content being the prime driver. As more people move towards consuming content online, it is time for Viacom18 to move into the world of connected screens. Hence VOOT.”

VOOT’s target audience strategy is in line with Viacom18’s strategy – it is a one stop destination for tots to adults.

With digital advertising led video-on-demand category set to develop into a ~$1 billion business opportunity, Viacom18 has lined up an aggressive mix of business, content and marketing strategies. “From a business standpoint, we are following the advertising led VOD model. As the market matures in the next 12-24 months, we will be evaluating both freemium and subscription led models,” explained Gaurav Gandhi, COO, Viacom18 Digital Ventures.

The VOOT bouquet of offerings will include fresh, new content mix, keeping in mind the varied demands of the consumer base. VOOT has planned six originals through its launch phase, and is all set to introduce India’s first mockumentary – Badman. Written and directed by Soumik Sen and co-written by stand-up comedian Anubhav Pal; this 4-part film has Gulshan Grover playing himself. Soadies, a comic spin off of the ever popular Roadies, was also unveiled at the launch. With Baba Sehgal in the lead role, the web sit-com produced by Frames has all his trademark antics to laugh your guts out.

The OTT platform will offer a personalised experience and intuitive product features to engage the always on generation. With VOOT Viacom18 continues to enrich the lives of every Indian with something for everyone.

VOOT will be available for free on iOS, Android and web and delivered over mobile and WiFi networks.

Viacom18 Launches its Digital VOD Platform VOOT

[caption id="attachment_104480" align="alignnone" width="700"] Sudhanshu Vats, Group CEO - Viacom18 & Gaurav Gandhi, COO - Viacom18 Digital Ventures[/caption]

Viacom18, one of India’s growing media and entertainment companies, has launched its digital VOD platform VOOT. VOOT will be an advertising led VOD platform and will be available for free on iOS, Android and web.

In a major move aimed at curating the largest repository of kids’ characters in the Indian OTT space, VOOT will house popular characters from across networks - from Nick characters like Dora, Spongebob, Motu Patlu to external popular characters like Chhota Bheem and Pokemon. In another first for an Indian OTT player, VOOT has launched with the repository of original content. VOOT Originals will roll out shows in both long and short formats across genres like comedy and drama. Furthermore, Viacom18 will move its entire content library, including COLORS, MTV and Nick, to be digitally available only on VOOT.

Commenting on the launch, Sudhanshu Vats, Group CEO, Viacom18, said, “India is at the cusp of a digital boom with over 400 million internet users and  200 million+ smart phone users spending significant amount of time online with entertainment and allied content being the prime driver. As more people move towards consuming content online, it is time for Viacom18 to move into the world of connected screens. Hence VOOT.”

VOOT’s target audience strategy is in line with Viacom18’s strategy – it is a one stop destination for tots to adults.

With digital advertising led video-on-demand category set to develop into a ~$1 billion business opportunity, Viacom18 has lined up an aggressive mix of business, content and marketing strategies. “From a business standpoint, we are following the advertising led VOD model. As the market matures in the next 12-24 months, we will be evaluating both freemium and subscription led models,” explained Gaurav Gandhi, COO, Viacom18 Digital Ventures.

The VOOT bouquet of offerings will include fresh, new content mix, keeping in mind the varied demands of the consumer base. VOOT has planned six originals through its launch phase, and is all set to introduce India’s first mockumentary – Badman. Written and directed by Soumik Sen and co-written by stand-up comedian Anubhav Pal; this 4-part film has Gulshan Grover playing himself. Soadies, a comic spin off of the ever popular Roadies, was also unveiled at the launch. With Baba Sehgal in the lead role, the web sit-com produced by Frames has all his trademark antics to laugh your guts out.

The OTT platform will offer a personalised experience and intuitive product features to engage the always on generation. With VOOT Viacom18 continues to enrich the lives of every Indian with something for everyone.

VOOT will be available for free on iOS, Android and web and delivered over mobile and WiFi networks.