Reliance Industries is doubling down on the media business, with a strong push to both the broadcasting and digital segments, by inducting marquee investors in its Viacom18 unit and launching big-ticket investments.
Viacom18 plans to raise more than Rs 12,000 crore ($1.6 billion) from investors, according to industry officials, to beef up the media business. Reliance will also invest its own capital.
Reliance has roped in Uday Shankar, former Star & Disney India chairman, and James Murdoch as strategic partners in Viacom18, according to the officials. Both individuals will play a vital role in contributing to the growth in the media business, they said.
With such a large financial war chest, Reliance is ready to take on rivals such as Amazon Prime Video, Netflix and Disney+ Hotstar. Reliance’s disruption strategy will be similar to what it did in the digital services business with Reliance Jio Infocomm.
Viacom18 is a joint venture of Reliance’s Network18, which owns 51 percent, and ViacomCBS, with a 49 percent stake. While Reliance will be the largest shareholder, Viacom’s stake is likely to come down, according to the officials.
Viacom18 operates satellite TV channels under the Colors brand in various languages, apart from MTV, VH1 and Comedy Central. It also runs a video streaming service branded Voot.
Moneycontrol reached out to Viacom18 for comment and will update this report when a response is received.
Sports portfolio
Reliance’s plans for Viacom18 come after Zee Entertainment and Sony Pictures Networks India agreed to merge and create India’s largest entertainment network by viewership, with a 26.7 percent share.
Star-Disney has a viewership share of 18.6 percent.
Viacom18 offers 53 entertainment channels and reaches about 600 million Indians monthly. It is building a sports portfolio, having picked up the media rights of properties including the National Basketball Association (NBA), FIFA World Cup 2022, Italy’s football league Serie A, Spanish football league La Liga, French football league Ligue 1, ATP Masters (tennis) and Abu Dhabi T10 (cricket).
Like the Zee-Sony entity, which said it will be dialling up its digital business, Reliance also has its eyes set on expanding the online business
segment. According to analysts, digital is the fastest-growing segment in the media sector, expanding at 22-23 percent.
Viacom18’s streaming arm Voot follows the fremium model, offering free content and content behind a paywall on Voot Select, which is the subscription video-on-demand (SVOD) platform. Voot Select was launched in March 2020 and got 1 million subscribers in less than a year.
However, competition is strong in the SVOD market, where Disney+ Hotstar, Amazon Prime Video and Netflix have 46 million, 21.8 million and 5.5 million paid users, respectively, according to a report by Media Partners Asia, a research and advisory firm.
Voot is building both its regional content and sports portfolio, which analysts said is the right strategy to onboard more subscribers. The platform recently launched its first Kannada web series.
Ferzad Palia, head of the SVOD and international business at Viacom18, had said the series is the first in a list of regional originals.
“Over the next 12 months, we will significantly dial up our regional language roster,” he had said.
Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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