The merger of the two media groups Zee Entertainment and Sony Pictures Networks in India has finally moved ahead.
Since being proposed in 2021, the merger has been through several rounds of regulator scrutiny, on the grounds that the merged entity would potentially gain a market monopoly status. But now, after the implementation of requirements such as closing linear channels, changing organisational structure, and introducing new share holders, India’s National Company Law Tribunal has now cleared the legal obstacle to the deal, which means the merger of the two can go ahead without further legal or political hindrance.
Zee and Sony are two established media players in India. Both own linear TV channels, film studios and streaming services. A very important part of the merger, therefore, would be the integration of Zee5 and SonyLIV, the two companies’ respective subscription video-on-demand (SVoD) platforms.
As of Q1 2023Q, Zee5 and SonyLIV are the 5th and 7th largest SVoD service in India, with 19m and 10.3m paying subscriptions. However, in the rapidly changing Indian SVoD market, the merged entity of Zee5 and SonyLIV will present a strong offering and a move towards consolidating the fragmented market. Disney+ Hotstar lost 12m subscribers in Q2 2023 after the loss of the IPL (Indian Premier League) along with other content rights. Meanwhile Jio Cinema, a free ad-funded video streaming platform established by India’s largest telco Reliance Jio, will likely see rapid growth in its subscriber base once it launches a standard subscription plan, as the new official home of the IPL, HBO, Paramount and Peacock content. In such a context, the merged entity of Zee5 and SonyLIV will provide a competitive service combining the content of the existing two services and could carve out a bigger market share.
Zee5 is known for its Drama and original productions, with content in 12 Indian regional languages, while SonyLIV is one of the most popular sports streaming platforms with rights to events such as the Olympics, the FIFA World Cup, European football leagues and major tennis tournaments. With limited overlap in content between the two platforms, the merged entity will grow its content library to contain almost 6,000 distinct titles, making it the third largest SVoD service in India by catalogue size, behind only Disney+ Hotstar (9.4k in 2023 June) and Netflix (7.6k).
Source:Ampere Analysis
