Billionaire Mukesh Ambani's Reliance Industries has called off the proposed merger of his group's entertainment business with Sony Pictures Networks India following a strategic rethink.
Ambani's television networks housed in Viacom18 Media Pvt Ltd were to merge with Sony Corp, with the Japanese giant having a bigger stake in the merged entity.
However, Reliance has now had a rethink and has decided not to pursue the merger route, sources with direct knowledge of the development said.
Instead, the company is now keen to invest more in digital content creation.
Digital media and entertainment is an essential pillar of telecom unit Jio's digital business strategy, they said adding Reliance plans to invest aggressively and grow the digital media business.
Reliance, they said, wants to retain management control over the digital operations and invest behind creating India's No.1 OTT destination as well as a broadcast platform.
Also, entertainment is central to Jio's FTTH plans in partnership and collaboration with other content and production companies.
There is a lot of interest from content companies and production houses in partnering with Reliance and Jio, and investors are keen to back such partnerships, they said.
An email sent to Reliance for comments remained unanswered.
Viacom18 Media Pvt Ltd is a joint venture between TV18 Broadcast Ltd and Viacom Inc. TV18 owns 51 per cent share in the unit.
Currently, Viacom18 operates more than 40 channels in seven languages. It also operates a film company, Viacom18 Motion Pictures, video streaming platform Voot, has interests in live events and merchandising, besides a distribution company, IndiaCast Media.
Sony Pictures Networks India, on the other hand, a subsidiary of Sony Corp., runs more than 20 channels, including several sports networks.
Sources said Reliance was no longer keen for a deal especially after the introduction of the fibre-to-home strategy that provides access to 12 OTT (over-the-top) streaming apps including Netflix, Amazon Prime Video, Disney+ Hotstar, JioCinema, Zee5, Sony Liv, Voot, Alt Balaji, Sun NXT, Shemaroo, Lionsgate Play, and Hoichoi.
Initially, Reliance was looking at the deal with Sony to boost its content pipeline.
Reports also suggested differences had cropped up between Reliance and Sony over the Japanese firm getting the majority stake in the merged entity. Reliance demanded a majority stake which was not immediately agreed to by Sony.