Reliance has entered in the film distribution business. This was in the news recently; the company was excited about a steady source of revenue for them.
Film distribution has become a professional affair. With increased digitisation of the cinemas, the next generation broadband would drastically change and shift the contours of the way we consume entertainment.
However, the broader subtext of the news ought to be seen in the light of what Anil Ambani proposes to do. He’s a smart chap and knows how to hedge his bets. His father invested in a refinery for which there was no stake holder earlier on. He had the far sightedness to observe that much more margins can be made from that crude which is usually discarded. Breaking all conventions, he ventured and spun off a thriving polyester business. Now, they are the unchallanged badshahs of polyester. Their scale (and contacts) have ensured that no one can scale up/ set up a greenfield unit. They can create any degree of artificial shortage and dictate the prices.
On a similar plan is Anil Ambani’s foray in the media business.On an earlier write up I was wrong to assume that Anil Ambani had spread himself too thin. In a later post, I had quoted from a Business Standard article which detailed Reliance’s multi crore ambitions for being the next media moghul.
This comes on the heels of the latest catch phrase“Convergence”. If Reliance’s broadband doesn’t get delayed, we might see some acquisitions and we might as well see copper being wired to our homes. My earlier diatribe about Reliance partnering with cable operators was prompted by a report in Indian Television.com which later proved to be media speculation.
(These are linked to my older posts; just giving Google enough reason to sniff around for the old links).
Hence, Anil Ambani would be in a position to dictate the prices, cross advertise in his media holdings and generate content for the Broadband consuming masses. I believe that this may be true. Let the future reveal it.