Sony's Dilemma: Dance with Zee or tango with Star and Viacom?

Ever heard that age-old wisdom? If you're really serious about tying the knot, don't let the engagement linger too long. Is the same theory at play in the epic saga of Sony and Zee's merger?

Come January 20 and the potential love story of Sony and Zee might just be making front-page news again! Sony has announced that it will continue the talks till January 20 (or discontinue from January 20, as speculated by most publications).

Now, what happens on the D-day? They might extend the merger talks, or drop the call-off bombshell, or unveil a white paper with specific conditions (like only NP Singh will be the CEO). For now, my limited intelligence can’t think of a fourth option.

However, amidst the storm of gloomy predictions whispering about a potential merger breakup, I want to hit rewind and revisit the origins of this merger decision. Also, with Sony flexing its muscles and dropping hints about being the puppet master in this merger dance, a burning question emerged in my head: where will Sony stand if the merger suddenly does a disappearing act tomorrow?

Crunching the numbers, the FY23 operating revenue for Culver Max Entertainment Private Limited, previously known as SPNI, stands at Rs 6912 crore. The network has a market share of 10% and encompasses 26 TV channels, a streaming platform (SonyLIV), and Studio NEXT—an independent production venture for original content- along with Sony Pictures Films India.

If the Sony-Zee merger doesn't make it to the grand finale, Sony might find itself in the ring with a fierce competitor. Star India and Viacom are set to tango, creating India's media behemoth with a jaw-dropping Rs 25,000 crore in revenue. Brace yourself for the numbers: 115 TV channels (77 from Star India, 38 from Viacom18), and not one but two heavyweight streaming platforms—Disney+ Hotstar and JioCinema. It's like a content library treasure trove, with over 2 lakh hours of entertainment waiting to unfold, if the stars align for that colossal deal.

Coming to Zee, its revenue for the fiscal ended 31st March 2023 stands at Rs 8167.62 crore.  It has a current market share of 16.8% with 50 channels in 11 languages, a streaming platform (ZEE5), a film production company (Zee Studios) and a music arm (Zee Music).  

Now looking at the other scenario. If the long-pending engagement converts into a marriage without a hitch, we get a TV channel bouquet that's practically a must-have in pay-TV homes—76 channels spanning every genre imaginable. The combined revenue would be a hefty Rs 15,000 crore, snatching up a significant 27% market share. Not to mention, they'd have some serious negotiating swagger in the ad deals arena.

The merged entity would go head-to-head with streaming giants like Netflix, Amazon Prime Video and Disney+ Hotstar, armed with not one but two strong platforms—SonyLIV and ZEE5.

On the movie business, they have a robust mix of Bollywood and Hollywood flicks, mainly from the Sony Pictures stable. ZEEL's aggressive film investments, coupled with SPNI's strategic moves in TV, streaming and music will create a movie powerhouse.

Now, let's talk about the advertising market shake-up. The beauty of this merger is in the complementarity. No competing products—just a seamless blend. ZEEL's got a strong regional game, while SPNI dominates in Hindi movies. In Hindi GEC, ZEEL shines in fiction, while SPNI brings the non-fiction thunder. And did we mention sports and kids? SPNI's covers that for ZEEL.

Sure, they've got different organizational cultures—one's a family affair, the other's a multinational extravaganza. But guess what? Experts see some synergies there too. Both operate with an owner-driven mindset. ZEEL's got promoters at the helm, and Sony? Well, it may be an MNC, but it's got that owner-driven vibe.

Furthermore, two years ago, when the blueprint for the merger was laid out, they aimed to take on Star solo. Fast forward to 2024, and Star is gearing up for a grander spectacle, possibly merging with Jio in the near future. Doesn't that amp up the urgency for this prolonged merger to finally see the light of the day?

One can’t deny that Sony's been through the wringer lately, rethinking its whole deal with Zee for a bunch of legit reasons. We're talking about a truckload of legal drama, financial rollercoaster vibes, and even their big boss getting caught up in corruption chaos.

Now, as the decision day gets closer and Sony's expected to drop the final verdict bomb soon, we wonder if it's not just about the potential heartbreak if this merger falls flat. There is a lot more that Sony needs to figure out if going solo in the market is the move. Can they handle the competition flying solo, or is teaming up with Zee the power move?

Bet the Sony team is deep into some serious contemplation mode as they kept tossing Zee more extensions in the last few months. The real question remains: will this engagement blossom into a joyous reunion, or will it crumble under the weight of pressures and egos? Let’s wait for January 20.