11/10/2021 - ORINA ZHAO
What Sony and Zee’s merger means for India’s SVoD market

The proposed merger of Sony Pictures Network India and Zee Entertainment, as announced in September 2021, is a significant development in the Indian TV and video industry, since both companies own a series of important assets, including TV broadcasters, production studios and streaming platforms. 


The move comes as the Indian content market is becoming significantly fragmented, with all the major local broadcasters launching their own subscription OTT platforms and with international streamers also keen to compete for audiences. Both Netflix and Amazon have targeted India as a market with major growth potential, while Disney+ Hotstar–with Disney and Star Originals and, crucially, Indian Premier League (IPL) rights–has grown rapidly to become the most popular subscription video-on-demand (SVoD) service in India within a year of launch. In order to compete, Sony and Zee have now decided to combine their services, including the SVoD platforms SonyLIV and Zee5. 


The biggest advantage derived from the merger is in content catalogue: The combined entity’s portfolio will be broad and include popular sports rights as well as premium TV series–which should allow it to compete directly with Disney+ Hotstar. From a sports perspective, Sony brings key rights to popular basketball and soccer competitions, including NBA, Bundesliga, UEFA Europa League and Champions League, while from the non-sports side, Zee will provide some of the most critically acclaimed content including historical Drama series Ramayan and Crime& Thriller film Meka Suri. This more balanced catalogue will cater to a larger portion of the population and will help drive new subscriptions.


However, the benefits of the merger might not be seen immediately. Partnerships between mobile telcos and SVoD services exist widely in India, allowing mobile customers to gain access to SVoD services as part of their mobile subscription with a minimal fee. Due to the wide accessibility of SVoD services, most customers in India subscribe to multiple SVoD services, while indirect subscribers from mobile bundles might account for the majority of total SVoD subscriptions. In Ampere’s Q3 2021 Consumer survey, over 40% of Zee5 and SonyLIV consumers have access to both services. If Sony and Zee opt for a single-plan OTT service, the merged service might experience a short-term  decline (relative to the combined total of subscribers to each service) to about 20m subscribers. However, in the longer term, the more comprehensive content offering should provide a solid base from which to further develop the service and compete with Disney+ Hotstar. 

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