A merger of Sony Pictures Networks and Viacom18 Media Pvt. Ltd is likely to be formally announced by mid-August, said three people familiar with the development.
The merged entity is however expected to start operations only by the end of 2021, the people said, requesting anonymity.
Viacom18 is a 51:49 joint venture between Reliance Industries Ltd (RIL) -owned Network18 and US-based Viacom Inc.
The likely merger has been in the works for a year-and-a-half and it will see Sony take a majority stake of 74% in Viacom, which will own the remaining 26% .
The deal is aimed at providing RIL greater control over India’s entertainment ecosystem and help it keep the content pipeline going for its distribution networks of DEN and Hathway–both cable service providers, and its broadband and Internet service Jio Fiber.
“It gives a lot more muscle to Reliance as a distribution-oriented company with this dedicated content pipeline behind them,” said one of the people cited above.
“Entertainment broadcast business is no longer core to RIL. Initially, when they had started assembling content business. Also it was meant for customer acquisition for Jio. And for increasing the data usage. RIL has realized that it can manage this with commercial relationships without owning the assets”. Said an executive at a large audit and consulting company. Declining to be named.
“Sony’s overall TV performance is very seasonal. Its marquee TV shows like Kaun Banega Crorepati, for instance, come once a year,” a media analyst said on condition of anonymity.
Source: Live Mint
