Adani via its media entity acquired NDTV today. NDTV was owned by the journalist Prannoy Roy and his wife Radhika Roy. Adani took control of a holding entity of the founders which owned ~30% of NDTV shares and made an open offer of another 26% in the open market.
With the acquisition of one of India's most trusted but highly controversial news network, I wonder what Adani could do next.
In June 2022, the Adani group acquired a 49% stake in BloombergQuint, a digital business news network, owned by Raghav Bahl who was also the founder of the currently Reliance-owned Network18 group.
With both business news as well as a mainstream news network in its kitty, Adani should ideally make a foray into the entertainment industry.
Adani group's announced its foray into the media industry in 2021 when it formed a subsidiary called AMG Media Network. In September 2021, it appointed senior journalist Sanjay Pugalia as its new CEO and editor-in-chief. Pugalia had launched CNBC-Awaaz and headed the channel for 12 years, set up Star News in Hindi, headed Zee News, and was part of the founding team of AajTak.
The first investment post Pugalia's appointment by Adani was in the very company he left - The Quint. Although, this reeks of a conflict of interest but Adani does not seem to be too bothered.
Now, the main point is that a strong and deep-pocketed player has entered the investment heavy market of Indian media. This is good news for an Aatmanirbhar Bharat. Let me explain how.
Indian entertainment broadcasting is currently dominated by 5 networks - Relaince's Viacom/Network18, American Giant Disney's Star network, Japanese-American Giant Sony, Shubash Chandra's Zee, and Kalanithi Maran's Sun Network (primarily in South India). Government-owned Doordarshan is a non-player since the last 15 years.
Recently, Zee merged with Sony India with the majority of the combined entity owned by Sony. This came after Subhas Chandra pledged his shares in Zee to start an infrastructure business and failed thus, necessitating this move. The loss of Zee to a foreign entity was a big setback to Aatmanirbharta in the strategic media sector.
The only Indian national broadcaster left is Reliance with its Network18/Viacom Network. Sun Group is also Indian but it is a regional player dominant in South India. This means 3 out of 4 national networks in India are owned by foreigners.
The Indian government allows 100% FDI in entertainment. This is the most baffling policy of any major country and unique to India. Other major countries do not even allow foreign media entities to enter the country and here in India, the majority of networks are foreign-owned. Europe is so far ahead that it even limits any single business group from owning more than 10-20% of the total market share to preserve its media plurality.
From Germany and France to Japan and South Korea, their own business groups own and operate the media. Although, the entertainment industry might be allowed to take in foreign investment news networks are a strict no go zone. Even here, India allows up to 26% of FDI.
Pakistan, a country that is living on doles from America, China, and the Middle East, has no presence of foreign media. All 3 of Pakistan's national media networks - ARY, Hum, and GEO are owned by Pakistanis. Private media entities are recent phenomena as until recently the state broadcasters would enjoy a monopoly. Many countries like Germany and UK still have their public broadcaster as the leading network in the country. British Broadcasting Corporation or BBC is a UK-government-owned media network that enjoys the dominant market share in not just British news but also in the British entertainment industry. Leading TV shows like Sherlock, Peaky Blinders, and Doctor Who have all been created by BBC. Compare this with the sorry state of affairs of the Doordarshan in India.
This is where the entry of Adani into the media industry becomes crucial.
The internet-driven YouTube revolution coupled with the westernisation and alienation of the Mumbai-based film industry has created a couple of media networks with a significant viewership. Moreover, the DD Free Dish given by the government to all those who cannot afford a DTH connection has added to the strength of these new entrants.
The last couple of years has seen the rise of networks like Enter10 and Goldmines that consistently top the TRP charts on TV as well as on Youtube.
Goldmines is a superstar Youtube network with ~200 million subscribers across all its channels. It recently struck gold when it released the Telugu movie Pushpa in the Hindi market without any promotion and earned more than 100 crores. Its Bhojpuri-dubbed KGF has clocked ~700 million views on Youtube.
Similarly, the Enter10 network enjoys a leadership position in the Hindi heartland with its channels Dangal 1 and Dangal 2. It has established a presence in other languages like
Bengali and Marathi as well.
Source: BARC
Bengali is the second most spoken Indian language in the world after Hindi with more than 25 crore or 250 million speakers. However, the market remains underserved. Many Punjabi songs with just 150 million speakers (mostly in Pakistan) have clocked 1 Billion+ views on Youtube in addition to Hindi and Bhojpuri songs. Bengali songs are still struggling. The most viewed Bengali song on Youtube has ~340 million views while the next two are below 200 million views. Haryanvi songs with just 25 million speakers have 1 song with 1 Billion+ views and multiple songs with more than 200 million views. SVF, the biggest production house of the Bengali entertainment industry, has launched its own Bengali OTT that has emerged as one of the biggest OTT platforms in India. Allu Aravind, a veteran producer of Telugu cinema and father of Telugu superstar Allu Arjun, has launched Aha! - a Telugu OTT that also hosts content from other south Indian languages - which has emerged as the other successful Indian OTT.
T-Series today is the biggest network on YouTube with ~410 Million subscribers across all its channel. It also has the most videos in the 1 Billion+ views category from India. Its main channel T-Series has ~223 Million subscribers as of today. Similarly, music labels and production houses like Tips, Ultra, RajShree, and Venus are very big on YouTube. Many regional language music labels such as Speed Records, White Hill Music and GeetMP3 in Punjabi, Wave Music in Bhojpuri, and Sonotek in Haryanvi are other big names on YouTube.
Identifying the growing entertainment industry, Believe, a French media company, acquired Venus music and rebranded it as Ishtar in 2019.
Apart from music and movies, kid's content is very popular on YouTube and has given birth to many companies - most prominent of which are Infobells and ChuChuTV with ~135 Million and ~106 Million subscribers across all their channels. Jingle Toons, CVS 3D Rhymes, WoWKids, Green Gold Animation, Zappy Toons, and USP Studios are other major kids' channels that have tens of millions of subscribers each.
You can check the list of most viewed videos in each language here and the most subscribed YouTube channels here.
Adani with its deep pocket should look at some of these entities as it looks to enter the media industry. Adani has a knack for inorganic growth to achieve market dominance. This was recently on display when he acquired the debt-ridden ACC-Ambuja cement to become the second largest cement manufacturer overnight.
He can and should adopt a similar method in the media industry which is on the verge of going compeltely outside the control and ownership of Indians.
According to my analysis, Adani should avoid outright acquisitions and instead buy a significant shareholding in the following order of priority.
Enter10 Network for TV
Hoichoi for the Bengali and Aha! for the Southern entertainment industry
Any one of the kid's channels - Infobells, ChuChuTV, Wow Kids, JingleToons, etc
The leading music label in Punjabi, Bhojpuri, and Haryanvi
Ultra for its content library
ErosNow for its OTT app, Hindi content library, and International partnerships
The combined cost of this would not be more than 2-3 billion dollars. This might be the best time to buy as India enters the hockey stick growth period that China witnessed between 2006-2019 when its GDP went from $3 Trillion to $12 Trillion.
There are many good acquisition targets and most of these are profit-making entities with good management teams which makes them even more attractive! The onus on improving India's Aatmanirbharta is now on Adani.
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