Sony to buy Zee in bid to beat Disney in India

Sony to buy Zee in bid to beat Disney in India

Zee deal promises edge in market share for Sony over Disney over Disney.

Could help Sony raise funds to bid for sporting events?

MUMBAI, Sept 23 Reuters - A merger of Japan's Zee and a domestic unit of India will create a television powerhouse to capture more advertising revenue, challenging top rival Walt Disney Co in a key growth market.

This will give them significant distribution muscle and an ad wallet, Uday Sodhi told Reuters. Sony Digital Head of India : They will become a formidable force. Wednesday's plan, finalised over 90 days of exclusive talks, will see Sony pump growth capital to the tune of $1.6 billion into its domestic unit to boost the prospects of the combined firm, while taking a majority stake in Zee.

The Sony funds will enhance the combined company's digital platforms and its ability to bid for broadcast rights in the fast-growing sports landscape, said both firms.

For the first time a viable challenge to Disney in India said one former Disney executive who sought anonymity because he was not authorised to speak to media about the company.

Both firms have operated in India for years, where accountants KPMG estimate the entertainment industry to be worth $0.5 billion in 2020.

The proposed deal aims to unite their networks, digital assets, production operations and program libraries, the firms have said.

India, with a population of 1.4 billion, promises eyeballs on a scale few nations can offer: 900 million television viewers, most of whom are crazy about cricket and sport, as well as melodramatic romance dramas.

Sport is a critical battleground, said executives.

The merged combination will have better prospects to attract strategic investors or raise funds to bid for the rights to major events, such as the Indian Premier League IPL Cricket Tournament, said the former Disney executive and three others.

Disney's star won the rights for Indian and domestic cricket matches for 2018-1923 for $946.75 million and paid $2.22 billion to bag global IPL rights for five years until 2022.

Some of these rights come up for bidding next year.

Both Sony and Amazon also have digital streaming platforms that are adding to the Disney Hotstar service, further ratcheting up competition in a market where Netflix and Amazon also operate.