How will Reliance – Tata Play deal for 30% stake from Disney will impact Indian media?

Reliance Industries, owned by Mukesh Ambani, is in dialogue to purchase a 29.8% stake in Tata Play from Walt Disney, a subscription-based satellite TV and video streaming service, as per sources.

The potential deal is seen as a strategic move by conglomerate to strengthen its presence in India's television distribution sector and expand its reach of OTT platform, JioCinema. However, the official statement is yet awaited. 

Tata Sons holds majority stake of 50.2% in Tata Play, while Walt Disney owns about 30% of stake in the firm. The rest is owned by Temasek, a Singapore-based fund. If the deal between Tata and Reliance proves to be successful, it will be the first collaboration between the two companies. It is also to be noted that Disney earlier had planned to divest its shares during Tata Play’s IPO, but with the postponement of the listing, it started looking for other exit options. 

This potential deal holds several implications for both Reliance and Disney.

For Reliance:

• Acquiring a stake in Tata Play, a major player in India's television market, would solidify Reliance's stand in the sector. It will help strengthening the position in TV distribution.
• The move will help Boosting JioCinema's reach, with integration of Tata Play subscribers into JioCinema's user base could significantly expand the streaming platform's audience.
• This move could create synergies with Reliance's telecom and broadband services, offering bundled packages and attracting more customers.

For Disney:

• Exits Indian linear TV market: This deal may signal Disney's intention to focus on its streaming service, Disney+ Hotstar, in India, exiting the linear TV space.
• Focuses on core strengths: By divesting its stake in Tata Play, Disney can concentrate on its core content creation and distribution businesses.
• Potential financial gain: The reported valuation of the deal suggests a profitable exit for Disney.

Meanwhile the deal is anticipated to play a significant role in Indian media:

• Increased competition: If the deal materializes, it could intensify competition in the Indian media and entertainment industry, especially between JioCinema and Disney+ Hotstar.
• Consolidation: This move could be a sign of further consolidation in the Indian media sector, with larger players acquiring smaller ones.
• Impact on consumers: Depending on how the deal is structured, consumers might benefit from wider content choices, bundled offerings, or competitive pricing.