INTRODUCTIONS

Merger and Acquisition is the process through which the ownership of companies and various business organizations or their operating units are transferred or consolidated with other entities. It is the way of surviving the ever-changing market to help a business to proceed towards a new diverse level and like any other industry, the Television and the Entertainment industry is observing Mergers and Acquisitions.

The price of running a media company is a big-budget operation that includes distribution and maintaining a continuous flow of new and ever-changing content. Various channels and streaming services with a high budget would take such opportunities to diversify and expand to earn huge amounts of profits.

The Indian Media and entertainment (M&E) industry is a booming sector for our economy and is making noticeable progress in proving its importance to the world as it moves forward in the show its rising consumer demands in the business. Currently, the Indian media and entertainment sector ranks 4th in the world media market and has reached 1.82 trillion rupees in the year 2019 which is considered a 9 percent growth. The Federation of Indian Chambers of Commerce and Industry states in its report this as the “Era of Consumer A.R.T – Acquisition Retention and Transaction.”[1]

The primary focus of several Production and Media companies is to develop content that is diverse in nature as our country is culturally and racially diverse. The Indian content at the same time is globally popular and is often dubbed with various foreign languages and hence capture a wide range of audience worldwide. Hence leading the media and entertainment sector towards worldwide expansion

OTT PLATFORMS

Viewers are often drawn towards new trends and shows which lead parent companies and investors to look for new trends and popular cultures. This constant need for new content and trends requires instant availability of entertainment and, to tackle the never-ending need led to the emergence of streaming services like ‘Hotstar’, ‘Voot’, and ‘Sony Liv’.

It is to be known that the key objective of merging or acquiring is the diversification of companies’ profile, which would help it to grow and establish new technologies and gaining more subscribers.

In recent years, the Media and Entertainment industry has observed a total of 21 Mergers and Acquisitions (M&A) which summed up to US$240 million. The online streaming services in India are estimated to reach US$ 4 billion by the year 2025, with various subscription services which will lead up to contribute more than US$ 1.5 billion. The media and entertainment market will grow at a compound annual growth rate (CAGR) of 13.5% during the financial year 2019-2024. It is expected to reach around rupees 3.1 lakh crore by 2024.[2]

Companies like Tiger Global Management LLC end up acquiring a 25% stake in the online streaming service known as ‘TVF’ (The Viral Fever) hence establishing an ‘Era of the Internet.’ As of January 2019, Zee studios launched a digital platform in order to produce premium content and create brand new intellectual properties for the All-digital Platform. Also Bharti Airtel’s direct to home (DTH) arm, Airtel Digital TV and Dish TV, merged by end of August 2019. And this year (2020), Hotstar, owned by the ‘Star Network’ was remodelled as ‘Disney+Hotstar’, through which they plan to provide all Disney+ shows and cinemas by adding regional subtitles and dubbing them.

The Board of Directors of the media company known as Zee Media Corporation Limited (ZMCL) has also acquired 49% stake of the radio broadcasting business of Reliance Broadcast Network Limited (RBNL) known as 92.7 Big F.M. Reliance Broadcast Network limited has transferred 45 operational and 14 new licences into two SPVs along with various other assets. This acquisition took place since Reliance was not able to grow in the business and was increasing its debts, Zee media took this opportunity in order to expand towards a larger media market with brand new content and increase its viewership.[3]  

MUSIC INDUSTRY

Music platforms such as Spotify has planned to launch a version of itself known as ‘Spotify Lite’ for low-cost android phones in India in order to gain more number of subscribers and also made a strategic acquisition of a podcast platform known as ‘The Ringer’ in order to acquire its huge number of premium subscribers[4]. ‘Reliance Jio’ acquired a music application known as ‘Saavan’ and plans an investment of 100 million dollars which further gives access to a brand new entertainment source of internet Radio and on-demand music availability. 

CONCLUSION

The Media and Entertainment Industry is witnessing an exceptional growth at this time. The rise will continue through various mergers and acquisitions made by media companies as they want to expand and diversify themselves along with their ever-changing and evolving consumers. The Indian Media and Entertainment sector is currently expected to grow at a much faster pace than the global average rate because of its increasing subscribers and their want of ultra-modern and pristine content continuously at the tip of their fingers.

-Amrita Ghosh

KIIT School of Law