The Indian entertainment sector is at the cusp of transformation. This transformation can be attributed to the recent announcement of the Jio-Hotstar merger. The announcement towards the combination of both entities i.e. Reliance’s Jiocinema and Disney’s Hotstar signifies a major moment in the over-the-top (OTT) market that seems to mark the beginning of a great consolidation.
Let us delve into the reasons that makes this merger revolutionary:
1 – Sheer Magnitude of Content:
The immediate impact of this merger will be the amount of content that this combination brings together. It creates a one-stop solution for viewers who look out for both regional and international content. Hotstar currently boasts of a premium international catalogue, Pixar, Marvel and Star Wars content and streaming of major cricket tournaments. Jiocinema on the other hand is entrenched in Local Content, Bollywood Movies and most recently Cricket as well. Together they will create a portfolio that will be unparalleled in the OTT universe. Cricket, being a superlative factor for both platforms, will drive a significant increase in subscriptions.
2- Massive Subscriber Base:
This merger will create the largest OTT platform in India by combining the users of Jiocinema and Hotstar. Additionally, Jio’s telecom network boasts 450 million subscribers, who are waiting on the sidelines to be onboarded as users of this combined entity. India also boasts of significant potential in terms of its smartphone penetration. The merged entity can easily indulge in cross-selling and leveraging the users of both platforms. This unprecedented scale gives Jio-Hotstar an unrivalled advantage.
3-Pricing Advantage:
Jio’s past history of aggressive pricing in its telecom subscription is something that can be expected in the OTT space post-merger. Jio’s affordability could mean millions more subscribers in the deeper rural and semi-urban pockets of India. This pricing strategy will democratize entertainment making premium content accessible to the masses earlier unheard of. An aggressive pricing strategy will make competitors’ life difficult and a broader shift in the market can be witnessed.
4- Market Positioning:
A merger of such a scale will change the competitive environment of the OTT market. The resultant entity will present a substantial challenge to other market players like Prime Video, SonyLiv and Zee5. The share of the market will be significantly tilted to the resultant entity. The scale, pricing and variety of audiences catered to by the Jio-Hotstar platform will be a big disadvantage for other players.
5- Tech Infrastructure:
Both Jio and Hotstar have strong technological capabilities ranging from Jio’s telecom infrastructure and data analytics capabilities to the latter’s content creation and digital outreach. The merger opens up new avenues of partnership viz. – AI-curated content, Augmented and Virtual Reality Experiences for sports and new releases and targeted ads. This will make the merged entity a content powerhouse.
The Jio-Hotstar merger just is a precursor to the restructuring that India will witness in the space of digital entertainment. For customers, this means more choices, world-class content and affordability. For competitors, it means a rapidly evolving landscape that must be countered with superior content and technology.
