INSUBCONTINENT EXCLUSIVE:
Industry watchers say that Zee-Sony merger is likely to generate huge advertising revenueA merger of Zee and a domestic unit of Japan's Sony
Group Corp will create a television powerhouse to grab more advertising revenue, challenging top rival Walt Disney Company in a key growth
market, industry officials said.The Sony-Zee alliance, with about 75 news, entertainment, sports and movie channels in more than 10
cent."This will give them significant distribution muscle and an ad wallet," Uday Sodhi, a former Sony Digital head in India, told Reuters
"They will become a formidable force."Wednesday's plan, to be finalised over 90 days of exclusive talks, will see Sony pump growth capital
to the tune of $1.6 billion into its domestic unit to boost the prospects of the combined firm, while taking a majority stake in Zee.The
Sony funds will enhance the combined company's digital platforms and its ability to bid for broadcasting rights in the fast-growing sports
landscape, the two firms have said."For the first time there's a viable challenge to Disney (in India)," said one former Disney executive,
who sought anonymity because he was not authorised to speak to media about the company.Disney, whose Star India network has dozens of
popular entertainment and sports channels, did not respond to a request for comment from Reuters.Both firms have operated for years in
India, where accountants KPMG estimated the television entertainment industry to be worth $10.5 billion in 2020.The proposed deal aims to
unite their networks, digital assets, production operations and program libraries, the firms have said.India, with a population of 1.4
billion, promises eyeballs on a scale few nations can offer: 900 million television viewers, most of whom are crazy about cricket and sport,
as well as melodramatic romance dramas.Sport is a critical battleground, the executives said.The merged combination will have better
prospects to lure strategic investors or raise funds to bid for the rights to major events, such as the Indian Premier League (IPL) cricket
tournament, said the former Disney executive and three others.Disney's Star won the rights for India's international and domestic cricket
matches for 2018 to 2023 for $946.75 million, and paid $2.22 billion to bag the worldwide IPL rights for five years until 2022.Some of those
rights come up for bidding next year.Both Sony and Zee also have online digital streaming platforms that will take on the Disney+ Hotstar
service, further ratcheting up competition in a market where Netflix and Amazon also operate.
