The SonyLiv-ZEE 5 video streaming service combine is poised to establish itself as a juggernaut in the hotly contested Indian OTT space where international giants like Netflix and Amazon Prime Video have been expanding aggressively due to the coming together of their complementary strengths of sports and regional shows.
The merger between Sony Pictures Networks India SPNI and Zee Entertainment Enterprises Ltd is a result of the merger between the two media behemoths. ZEEL is one of the largest in the media and entertainment space. The merged media entity, whose name is not finalised, will now be listed on the stock markets. Their combined revenue is more than 16,000 crore.
Sony will bring sports to the table and Zee will contribute its regional programming with the merged SonyLiv-ZEE 5 OTT entity. ZEE 5 is stepping up its regional focus on original programming in Punjabi, Tamil, Telugu and Bengali for its OTT platform, with 50 per cent of their audience coming from regional language content.
Zee 5 India Chief Business Officer Manish Kalra told Business Today that around 30 -- 40 percent of their content investments will be in the regional space going forward, and that they expect this percentage to increase as they cater to untapped regions. In another instance, Kalra had argued that there is a lot of synergy between Zee 5 and SonyLiv simply because we are strong in Indian and regional languages and we do see cricket and English as a gap on our platform. Sony's sports offerings include cricket, football, tennis, Ultimate Fighting Championship and WWE, with the key cricket property of Indian Premier League IPL being the missing piece of the puzzle. Star India and its OTT player Disney Hotstar currently hold the IPL broadcasting and digital rights for the 2018 -- 22 period, for which it paid a whopping Rs 16,000 crore. With the bidding for the 2023 -- 27 cycle coming up later next month, the stage seems to be set for a tough contest with BCCI reportedly setting its sights on selling the broadcasting rights for at least $5 billion or Rs 11,000 crore. Sony will have the chance to invest in premium content, including sports, in the merged entity $1.575 billion or Rs 11,000 crore. Punit Goenka, ZEE MD CEO, said last month that we will be able to generate great value for our stakeholders.
Each ZEE and Sony have an OTT revenue base of Rs 370 crore-Rs 400 crore, according to research analyst Elara Capital, who had earlier estimated that the digital platform OTT could emerge as the second largest homegrown OTT video streaming service after Disney Hotstar in India.
Taurani said that a stronger content proposition could also allow the combined OTT entity to command premium pricing, in line with Disney Hotstar at Rs 1,500 per year. He said that this may prop up higher subscription revenues, which are currently dominated by bundles or partnerships.
SonyLiv's monthly active user base is 45 million, while Zee 5 has 72.6 million MAUs. India's OTT user base is 353.2 million people and there are 96 million paid users of OTT platforms, according to Ormax Media.