With the 90-day due diligence period on the deal that entertainment conglomerates Zee and Sony had announced last September ending yesterday, the former's board of directors formally approved the merger of the two entities yesterday.
According to a regulatory filing by Zee, Sony will hold a majority stake of 50.86% in the new entity. Zee promoters will hold 3.99%, and other shareholders get 45.15% stake in the entity. The new conglomerate will boast 75 TV channels, two video streaming services (SonyLIV and Zee5), two film studios (Zee Studios and Sony Pictures Films India) and a few other content producing establishments.
Basically, the two companies' linear networks, digital assets, production operations and programme libraries become one.
- Zee5 launches in the US with 130,000-plus hours of content
- India has 353 million OTT users and 96 million active paid subscriptions
Zee and the Invesco threat
The combined company will be publicly listed in India and Zee's Punit Goenka will lead the new company as its managing director and CEO, but Sony will have 5 representatives in the new 9-member board.
“It is a significant milestone for all of us, as two leading media & entertainment companies join hands to drive the next era of entertainment filled with immense opportunities. The combined company will create a comprehensive entertainment business, enabling us to serve our consumers with wider content choices across platforms," Goenka said in a statement.
Aside from creating an entertainment behemoth (2nd largest entertainment network in terms of revenue), the deal is also expected to come as a relief to Zee promoters who were facing the heat from Invesco, Zee’s largest shareholder.
Invesco had sought an EGM to recast the Zee board and remove Puneet Goenka as the CEO and MD. The matter is now in the court and company law tribunals. How the Invesco threat will play out is difficult to say now.
Star-Disney has to be on guard
Anyway, India has four major broadcasting channels or players -- Star, Colours, Zee and Sony. Out of these four, two have merged. So the new entity is definitely going to be a big player on the global platform as well as in India.
Zee is available in 173 countries and reaches over 600 million individuals in India every week. Sony, for its part, goes to over 700 million viewers in India per week and has presence in 167 countries.
On the OTT side, SonyLIV is currently revamping is app with the help of TCS, and is also increasing its content from South India. The were also reports that Sony was in talks with Amazon Prime to jointly bid for cricket streaming rights that could include the highly popular Indian Premier League (IPL) rights.
Zee is sticking to its Bollywood content while expanding its presence in markets like the US and Canada. For interesting content, Zee5 has also tied up with players like TVF.
The combined might of the two can lead to a shakeout in the Indian entertainment market is the long term prognosis from analysts. Market leader Star and Disney better watch out. For, it now has a rival who can match it both in terms of content as well as money.
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