Why Sony Pictures Networks and Viacom18 parted ways?

Sony Pictures Networks and Viacom18 parted ways as the negotiations between Mukesh Ambani’s owned Reliance, and Sony did not go through. The Indian business giant holds a majority stake in Viacom18. This gave it the power to make the decision for one of the biggest deal fallouts of all time. According to the sources, the talks between the two companies regarding the deal was going on from last year.

Why did the deal fall apart?

Sources say that there are some primary reasons why the deal and negotiations did not go through. We all know how aggressive is Reliance in branching out it’s businesses to new sectors. And the best part is, it completely obliterates the competition of the sector it steps into. It is believed that Reliance is planning to invest huge amounts in the media industry and enter the market.

With the rise in the increase of OTT platforms, the company also focuses on making one of the largest OTT services platforms in the country. That is why it wants to retain control over Viacom18 completely. This will not only open the company up to a new market but also give tough competition to the likes of Amazon Prime Video, Hotstar and Netflix.

Sony Pictures Networks and Viacom18
Image Source: Exchange4media

If the deal between Sony Pictures Networks and Viacom18 went through Reliance will lose the majority stake in the company. At the same time, SPN will then be having a 51% stake in the newly formed group. Their OTT services plan goes hand in hand with the Fibre services that the company provides.

At present Jio is collaborating with other content firms to bring in their services with Jio Fibre. But if the company manages to bring its own OTT platform, then it can gather a huge customer base very easily. With the business model, the company can also bag a lot of investment very easily and forward to disrupt the media industry.

If the deal between Sony Pictures Network and Viacom18 did go through, it would have become one of the biggest mergers of all time. No doubt why Reliance stepped in to stop the merger. The merger could have very well created an opportunity for Sony to bring in new products in the Media Industry.

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