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Impact of Mukesh Ambani's media move

January 04, 2012 14:38 IST
What really does the funding of the merger between Network18 and Eenadu by Mukesh Ambani's Reliance Industries mean?

How does it change the landscape of the $17-billion Indian media and entertainment business?

It does three things – kick-starts big-ticket consolidation, gets another serious industrial house into media and raises a clarion call for an independent (of the government) media regulator.

Take impact one. The details are ambiguous. But there is no doubt that, if it goes through, this will be after the Star-Zee distribution joint venture last year, the first really big media deal in India.

It creates a roughly Rs 2,000 odd crore media company that will jostle with Star, Zee and Sony for rights to the top spot in broadcasting.

For very long it has been known that full digitisation will change the fragmented nature of TV distribution in India. It will create a handful of operators who will control access to India's 142 million TV homes.

This deal too is in preparation of the future. It is however not the last such deal.

Remember that Sony is still on the prowl for a regional player. And Sun, which has a distribution deal with Network18, might look for another partner up North after this.

Two, after Airtel (DTH, music), Tata Sons (DTH), Mahindra (publishing, films) and ADAG (media) it marks the entry of another really large, established industrial house in media.

That is good because their ability to deal with the structural problems of this business is better than that of thousands of small players. 

Three, it should increase the decibel level for the call for an independent (of the government) media regulator to look into issues of content and distribution.

The level of consolidation in the sector contains serious possibilities for creating monopolies on the ground. In any case, when the digitization ordinance was passed late in 2011, there were concerns about the coming consolidation.

Vanita Kohli-Khandekar
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