So what does the Reliance controlling stake mean for Viacom18?

01 Feb,2018

 

By A Correspondent

 

It was sure to happen. Reliance Industries is a serious player and investor in the TMT ecosystem, and more importantly, anything that fuels its telecom business.

 

When it first chose to invest in Network18 in 2012, it had indicated that the investments in media would eventually help in building the content pipeline. There were many reservations expressed when the Mukesh Ambani-run Reliance Industries took complete charge of the news business of Network18 (and Television18) in July 2014. The reservations then may have been with reason given the fear that big business-controlled news business will bring in its own commercial and political interests into play. However, as has been seen, all these were proved incorrect. Editorially, the news offerings are objective, and decidedly a lot more than some of the rightwing channels.

 

A CNN-IBN may have opted out of getting a bigname news anchor, but that has actually worked in its favour. Rahul Joshi as CEO of the news business and group editor-in-chief has elevated the overall standards. And from what we learn, there is an overall delight with the big(g) bosses at Reliance Industries headquarters.

 

In fact it’s the pace with which Reliance work could significantly help Viacom18 change gears, say industry observers.

 

There is also delight over the Viacom18 valuation of USD 2 billion. This was determined by the one percent stake buy by the Reliance Industries-owned TV18 at the value of USD 20 million or around Rs 127 crore. The transaction is likely to be completed in a month.

 

Until the announcement happened, both Viacom and TV18 had an equal 50 per cent equity in the joint venture. Viacom18 started out with three channels and it has grown into a 44-channel multiple platform business including films, merchandise and live entertainment.

 

Meanwhile, the brand and content licence between Viacom and TV18 has been extended by another decade which will ensure the continuance of channels like MTV, Nickelodeon, Comedy Central etc in the fold. Viacom18 has reported total revenues of Rs 30,407 million in financial year 2016-17, charting a 40x-plus growth in topline since inception.

 

This is what key captains of the Network18, Viacom and Viacom18 said in a communique:

Adil Zainulbhai, Chairman – Network18: “The transaction further enables our vision for Viacom18 to accentuate its focus on excellence and integration in the broadcast and digital space. The entertainment powerhouse continues to be bolstered by Viacom’s global expertise in content creation and curation, along with Network18 group and affiliates’ strength across the media & telecom value-chain”

 

David Lynn, CEO – Viacom International Media Networks: “Viacom 18 is one of the fastest growing companies in India’s dynamic media and technology sector and, as a result of this transaction, we believe it will be even better-positioned for accelerated growth through closer integration and alignment with the Network 18 Group and its affiliates, including India’s fastest growing mobile network, Jio. Viacom remains strongly committed to our Viacom 18 joint venture with the Network 18 Group and we are retaining the vast majority of our ownership stake in the company. We’re delighted to extend our licensing deal with Viacom 18 and see clear potential to expand it in live events and recreation, in line with our growing global presence in these lines of business.”

 

Sudhanshu Vats, Group CEO – Viacom18: “We turned 10 last year and our growth journey has been exciting to say the least. None of this would have been possible without the support and commitment of both our partners. This development will allow us to leverage deeper synergies with Jio as we enter our next growth phase. As India’s youngest full-play media organization, we remain committed to winning the hearts of our audiences across all our on-air, on-line, in-store, in-theatre and on-ground businesses- and enriching the digital life of every Indian.”

The key factor in the development is doubtlessly TV18 taking operational control of Viacom18. Given Reliance Jio and a significant interest in the growing the media and entertainment landscape, it is expected that there will be greater synergies. Also, given the larger interests of Relaince Industries in sports, an entry into sports broadcast is not totally ruled out. Beyond the current baby steps that the group is taking with the tri-nation Nidahas Trophy next month.

 

What remains to be seen is how the plans for Voot play out, given that Jio has its own platform plus there’s Alt-Balaji.

 

 

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