Sony Pictures-ZEEL Merger: Win-win deal for consumers, stakeholders

Sony Pictures-ZEEL Merger: Win-win deal for consumers, stakeholders

Shares of Zee Entertainment Enterprises (ZEEL) surged 2% on Wednesday after the company announced that its board approved a merger with Sony Pictures Networks India Pvt Ltd (SPNI).
ZEEL and SPNI have signed definitive agreements to merge their operations. Accordingly, they will combine their linear networks, digital assets, production operations and program libraries.
The agreements follow the conclusion of an exclusive negotiation period during which ZEEL and SPNI conducted mutual due diligence.

The combined entity will own 75 television channels, two video streaming services, two film studios and a digital content studio, hence the entity will emerge as a formidable player.
The merger will result in favourable cost synergies for the television business, with increased profitability and good content offering on the digital front with variety of options now available on ZEE5 and SonyLIV, the OTT platforms owned by the two companies.

Further, the negative impact of NTO 2.0 (the new tariff order brought in by the Telecom Regulatory Authority of India) will be relatively subdued for ZEEL-Sony as an entity as they can efficiently bundle their best channels, thus enjoying an edge over competition.
ZEEL-Sony entity would command 22% of the advertising revenue market and would become a dominant force in the broadcast industry along with the Star network.
Their consolidated digital business is expected to touch Rs 9,100 crore by FY2024. There is potential for these revenues to expand as a big shift to SVoD (subscription video-on-demand) is likely to emerge in the coming years.

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