After spurning Zee, Sony sets sights on aha

Arha Media, a joint venture between Geetha Arts and My Home Group, has roped in KPMG Corporate Finance as a strategic adviser, said three people familiar with the development.

A possible deal could value aha at ₹1,500 crore to ₹2,000 crore, one of them said. 

Promoted by the ₹9,000-crore My Home Group and backed by film producer Allu Aravind (Geetha Arts), aha was launched in March 2020 as a Telugu content service before it subsequently added original Tamil language content to its repository. 

With Sony terminating its proposed merger with Zee Entertainment Enterprises, regional content remains a big missing piece in its portfolio, said one of the persons familiar with the developments. 

“Though it is too early and they (Sony) are still coming out of the termination of a deal that was in the making for over two years, there is interest for regional, especially South Indian content,” he said. “But it is too early to say if a deal will happen.”

All the three persons mentioned spoke on condition of anonymity.

Sun TV, which had also explored acquiring the regional assets of Disney, is looking at aha to strengthen its content library and slate, as its over-the-top (OTT), or video streaming, platform, Sun NXT, is yet to reach significant subscriber numbers, said another person familiar with the talks.

Arha Media, Culver Max, KPMG and Sun TV did not reply to emailed queries on the stake sale negotiations.

Arha has been looking to raise funds for some time as competition in India’s cluttered video streaming space has intensified, adding pressure on revenues and profitability, said one of the persons mentioned earlier.

South India accounts for almost 35% of India’s total media and entertainment market. The region’s streaming and digital media market is expected to grow at a compound annual growth rate of 25%, which would make it one of the fastest-growing sub-segments in the domestic media and entertainment market, according to a Confederation of Indian Industry report.

aha has a diverse content library of more than 900 movies and series, including reality shows as well as originals, catering to at least 12 million monthly active users, making it the largest regional OTT platform in the southern market. 

The company expects to reach more than 25 million domestic and 3 million global paid subscribers for its Telugu and Tamil content by FY26.

Last month, N.P. Singh, managing director and chief executive at Culver Max Entertainment, assured employees that Sony had “long-term plans” for expanding in India despite ending merger talks with Zee. 

“We will actively explore new organic and inorganic possibilities to strengthen our market presence,” Singh wrote in an email addressed to employees. 

SonyLIV, the video streaming platform owned by Culver Max Entertainment, is also betting on shows in Telugu, Tamil and Malayalam, spurred by the rapid adoption of online content in the southern states. 

“We’re looking at an expansion of our content slate plan in the south and will start dropping shows in three languages—Tamil, Telugu and Malayalam, which should be followed by Marathi and Bengali,” Saugata Mukherjee, head of content, SonyLIV, said in an interview in December. SonyLIV aims to roll out 18 titles across the three southern languages this year.

India’s media sector is likely to see more mergers and acquisitions, especially with Reliance Industries Ltd and Walt Disney expected to reach a deal shortly.

Mint reported last month that Disney would transfer its assets and employees to a new company in which Reliance Industries is expected to pick up a 60% stake. Later, assets and employees of Viacom18 Media Pvt. Ltd, majority owned by Reliance Industries, will also likely be transferred to the new company or be merged via another step-down subsidiary. 

An announcement in that regard is expected this week. 

“Competition in the OTT space is intensifying in the country, triggering consolidation and attracting several global players to look for deals that can strengthen their grip in the entertainment space,” said one of the persons mentioned above.