The Indian television industry made a whopping Rs 70,000 crore in 2021, and bulk of this came from subscriptions at Rs 40,000 crore, while the rest was advertising revenue. Zee and Sony are two of the names that quickly pop into an average Indian viewer’s mind when someone talks about TV channels. Which is why when these two TV giants come together to form India’s second-biggest network, the competition watchdog is more concerned than entertained.
Ready to lose few channels for greater gains
To address fears about the combined entity having excessive bargaining power to even raise subscription rates for more profits, Zee and Sony have reportedly offered to shut down channels. Prioritising the much talked about merger, the two entertainment networks are ready to take three or four channels off air in certain markets. Combined market share above 40 per cent of Zee and Sony in Hindi, Marathi and Bengali general entertainment as well as Hindi film channels, has caused concerns for competition commission of India.
The merger comes at a time when Q1 profit for Zee Entertainment was 49 per cent down on a year-on-year basis, and Sony Entertainment’s operating revenue in FY22 went up by 21 per cent. The joint entity between Zee and Sony’s parent firm Culver Max, will have three flagship channels Zee TV, Sony Entertainment Television and Sony SAB, apart from leading regional and Hindi film channels.
New Indian OTT behemoth in the making?
SonyLiv and Zee5 will also bring their sports and regional programming together, to be financially stronger for taking on giants such as Netflix and Amazon in India. Even ahead of the merger, the two leading networks are together making Rs 16,000 crore, and stakes are simply high enough for them to let go of a few channels.
Zee Entertainment’s founder Subhash Chandra stepped down in 2019, after he had to sell his shares in the firm to repay loans for which Chandra had pledged his stake. The merger with Sony even led to demand from Zee’s offshore backer Invesco to remove his son Punit Goenka as CEO.
