Disney and Reliance Industries Announce Media Mega Deal in India

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When Reliance was started by Mr. Ambani’s father in 1958, it was a trading shop, mainly of polyester fiber. It grew into petrochemicals and now runs the world’s largest oil refinery at the port in Jamnagar, on a remote bit of India’s western coastline. Along the way, it got into telecommunications and other businesses, and in 2016 started a low-cost mobile network, Jio, which quickly became the world’s third largest.

JioCinema, part of a growing family of Jio properties but a relatively small platform when India’s streaming wars began, looks likely to become the new home for Disney’s content in India. At one point another rival looked ready to emerge, as the Japanese media giant Sony was seeking to expand its operations in India by buying Zee Entertainment.

With Zee, India’s first private cable-TV company, Sony would have been big enough to divide up the TV-and-digital market with Reliance and Disney. But Sony backed out of its deal with Zee on Jan. 22, frustrated by the founding family’s insistence on maintaining control.

Sony’s breakup with Zee seems to have made things even harder for Disney. For one thing, Zee still owes Disney for cricket licensing. Bloomberg reported that the estimated value of Disney’s India unit sank to $4.5 billion from $10 billion. Sony’s failed merger also made the eventual Disney deal look sweeter for Mr. Ambani: What would have been a landscape defined by two giants is instead looking likely to be dominated by just one.

Being such a sprawling conglomerate, Reliance has an advantage in the battles for media domination. It does not need content to pay for itself directly. When their subscribers are brought into their retail, telecom and credit operations, the cost of making shows looks small by comparison to combined revenue.

Brooks Barnes contributed reporting from Los Angeles.

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