Reliance Industries is reportedly in discussions to acquire a 29.8% stake in Tata Play, a subscription-based satellite TV and video streaming service, from Walt Disney, Business Standard newspaper reported citing sources close to the development.
The potential deal signifies Mukesh Ambani-owned Indian oil-to-telecom conglomerate’s strategic move to strengthen its presence in India’s television distribution sector and expand the reach of its OTT platform, JioCinema.
Tata Play did not respond to ET Online’s query on this development.
Tata Sons, the holding company of the Tata group, currently holds a majority 50.2% stake in Tata Play, with the rest of the shares owned by Temasek, a Singapore-based fund.
ET had reported in October last year citing sources aware of the development that Singapore-based investment firm Temasek is in advanced talks with the Tata Group to sell its 20% stake in Tata Play to the Indian conglomerate that owns the largest stake in the direct-to-home (DTH) company.
However, no agreement was reached.
If the negotiations between Reliance and Tata Play prove successful, it would mark the first collaboration between the Tata group and the Ambanis. Additionally, it would expand the reach of JioCinema, Reliance’s streaming platform, to Tata Play customers. Disney had initially planned to divest its shares during Tata Play’s IPO, but with the postponement of the listing, it began exploring other exit strategies.
Sources familiar with the matter said that Reliance aims to offer its entire JioCinema content catalog to Tata Play customers upon acquiring the stake.
“I think if this is true, it does make sense for Reliance because they are already present on the MSO (multiple-system operator) side through Hathway and DEN, but DTH side they don’t have presence,” Karan Taurani, analyst at Elara Capital, told ET Online.
“In the current market environment, MSO side is losing market share to DTH, which has got a more premium customer base compared to MSO in terms of ARPUs. So, DTH has a protected base with the premium customer base and that will augur well for JioCinema to tie up and reach out to a larger subscriber base,” he said, adding it will also limit the competitive intensity for Reliance that has bundled offerings.
Bankers are currently assessing the value of Disney’s stake in Tata Play, Business Standard reported citing sources. Despite its significant presence in the market, satellite television broadcaster Tata Play faces challenges from competing streaming platforms like Netflix, Hotstar, JioCinema, and Amazon Prime. In the fiscal year ending March 31, 2023, Tata Play reported a loss of Rs 105 crore on revenue of Rs 4,499 crore, contrasting with the previous year’s profit of Rs 68.60 crore on revenue of Rs 4,741 crore.
Source: Economic Times