The merger terms put distribution at a premium over content, and account for cricket telecast rights held by Reliance. Disney’s global move out of linear TV allows it to devote more investment to content, which Indian consumers don’t support as advertisers seek scale on platforms set up by tech companies such as Meta and Alphabet. By offloading distribution, Disney stays in play in a market key to its global strategy while ramping up competition at home against Comcast and Netflix. The deal is part of the restructuring forced on Disney by the expensive Fox buyout just before viewership tanked during the pandemic.
India will remain a temperamental entertainment market with entrenched local players that use market imperfections to their advantage. This has facilitated user-generated content that is cannibalising advertising revenue. Reliance and other telcos have been eyeing the steadily growing revenue stream on OTT platforms that their investments in spectrum and networks support. The deal could help India’s entertainment industry to untangle some of its knottiest issues. An obvious winner would be the consumer, who will be assured of investments in content creation, tech and distribution that he can’t sustain himself.
