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Screen synergy: Diverse portfolios of Sony and Zee to complement each other

Experts believe that the Zee and Sony merger is going to create an exciting media behemoth with many benefits for both Zee and Sony.

According to experts, both companies own a diverse portfolio of properties that will complement each other instead of competing in the aftermath of the merger.

Sony, Zee to merge into blockbuster entity

ZEEL MD and CEO Punit Goenka said that they are expecting revenue synergies of 6-10 per cent due to relatively less overlap between the companies which are both pretty distinct.

Market share
The combined entity is also said to command around 25 per cent of the market share in the linear TV space and could purportedly bring in $2 billion of annual revenue.

Shailesh Kapoor, CEO of Ormax Media, said, “The coming together of two entertainment giants is an exciting development, as it’s the biggest consolidation seen to date in the entertainment industry in India. It will be interesting to see how the brand houses under Zee and Sony integrate eventually, as both have distinctive imagery built over more than two decades.”

According to Karan Taurani, Senior Vice-President and Research Analyst for the Media, Consumer Discretionary and the Internet Space at Elara Capital, both companies carry a pretty distinct content library; therefore, the merger will be complementary, leading to better synergies.

“There is a big opportunity in terms of synergies as Sony is doing well in sports, mainstream general entertainment category whereas Zee has a strong recall on regional genre, which is less or absent for Sony. Both have a very strong movie catalogue which can be used for OTT and TV offering,” said Taurani.

Different content
Even in the OTT space, Tuarani noted that both companies can go to market together with their merged OTT offerings, which are slightly different in content. Sony is more into sports and mainstream shows whereas Zee is into regional web series. Hence the content strategy can augur well to create a platform that has all of the offerings.

“They may emerge the second-largest home-grown OTT after Disney+ in India,” Taurani said.

Vivek Menon, Co-founder of NV Capital, which recently launched India’s maiden media and entertainment credit fund, said, “This is a positive and welcome move. After the merger talks of Sony Entertainment with Viacom18 dropping, this consolidation will add synergies to the existing portfolio of both the entities, especially in the verticals of Sports & OTT. Further Zee will also have access to Sony’s international catalogue to exploit and monetise.”

According to experts, the corporate governance overhang of Zee Entertainment should also fade away with this merger and enhance investor confidence.

Furthermore, the combined entity will be in a superior position to compete with Disney more effectively both on the distribution and advertising side.

The merger could create a broadcasting behemoth with 75 channels spanning the regional, English, Hindi programming, kids entertainment and sports genre. The Hindu BusinessLine

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