Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Ltd (ZEEL) announced that they had entered into an exclusive, non-binding Term Sheet to combine both companies’ linear networks, digital assets, production operations and program libraries.
The merger will mean that the combined entity will operate a network of 75 channels with SPNI operating 26 channels after it added two new channels in the sports genre and Zee’s 49 channels.
In addition, Zee has a presence in over 173 countries and a reach of more than 1.3 billion people around the globe and reaches over 600 million individuals in India every week whereas Sony reaches out to over 700 million viewers in India and is available in 167 countries.
Also, both Zee and Sony have video streaming platforms — ZEE5 and SonyLIV.
Sony, which has now merged with Zee, was also in the picture when Subhash Chandra, founder of Zee was looking for a buyer for the Zee stake sale in 2019.
It was in November 2018 when Indian media conglomerate Zee Entertainment had decided to sell half of its promoter holding of about 42 percent in flagship Zee Entertainment Enterprises Ltd (ZEEL). The company called it a “strategic review of its business in the changing global media landscape”.
After Zee’s announcement, Macquarie Capital had said in a research note that a global partner will prove beneficial for Zee to plug gaps in the firm’s media-tech prowess.
A leading candidate in the race to buy stakes in Zee was Sony. And experts were of the opinion that acquiring stakes in Zee will help Sony increase its presence in India.
If we look at Zee’s regional presence, the network has 20 percent viewership share in the south market.
According to an Elara capital report, Zee Telugu entered the top 10 list with 7.8 percent viewership share in July. During the same period, Zee continued its leadership in Karnataka led by Zee Kannada, Assam/North East led by Zee Bangla, and in all other major regions. It was followed by the Star group that stood second.
Zee witnessed gains across markets for its regional channels, the report added.
The channels that saw strong gains in July included Zee Bangla, Zee Kannada, Zee Anmol, Zee Tamil, Zee Keralam.
Along with general entertainment channels, Zee has a strong presence in the movie genre with 25 percent of the total television movie consumption in India happening on its network, the company said in its annual report.
With the Zee-Sony merger, viewers of the Sony network in India will have access to Zee’s over 260,000 hours of television content and also its Hindi film library with rights to more than 4,800 movie titles across various languages.
Along with TV, movies and digital, Zee has also ventured into live events with Zee Live.
When it comes to Sony, the network has many sports properties on offer.
The broadcaster for the India tour of Australia that took place earlier this year saw close to 75 million viewers on Sony Sports TV channels for the test matches alone.
Overall, India’s tour of Australia was watched by more than 100 million viewers on television.
Sony had also aired the Tokyo Olympics which recorded 69 million viewers in India in its opening week.
Along with cricket, Sony also offers sports properties including WWE (World Wrestling Entertainment) and UFC (Ultimate Fighting Championship), among others.
This is why the coming together of Zee and Sony will make the combined entity the largest network in India.
ZEEL’s strong expertise in content creation and its deep consumer connect established over the last 3 decades, coupled with SPNI’s success across entertainment genres (including gaming and sports) will add significant value to the merged entity and its management team, thereby increasing shareholder value multifold, the company said in a statement.
“The value of the merged entity and the immense synergies drawnbetween both the conglomerates will not only boost business growth but will also enable shareholders to benefit from its future successes. As per legal and regulatory guidelines, at the required stage, the proposal will be presented to the esteemed shareholders of ZEEL for their approval,” said R Gopalan, Chairman, ZEE Entertainment Enterprises Ltd.Internet Explorer Channel Network