A major television channel distribution merger between India’s Sun18 and MSM Discovery is the current subject of media speculation in India.

The two companies are reported to be in talks to jointly distribute popular channels such as CNN-IBN, CNBC TV-18, MTV, Colors, Sony, SAB and SET Max.

The news follows the consolidation of the carriage businesses of erstwhile rivals Star India and Zee Entertainment Enterprises to form Media Pro Enterprise India, announced late in May.

Sun18 is the year-old broadcast distribution venture between the Sun Network, run by Kalanithi Maran, and Raghav Bahl’s Network 18. Meanwhile, MSM Discovery – branded as TheOneAlliance - is a tie-up between Multi Screen Media, which owns the Sony television channels in India, and Discovery Communications.

An MSM Discovery board member is reported to have told Live Mint that the company was in talks with Sun18, though it was too soon to say whether anything would materialise from the discussions.

“At this point, OneAlliance is speaking to everyone in the business,” the anonymous board member is quoted as saying by Live Mint.

The move towards greater consolidation in India’s carriage industry is to challenge the Indian cable industry’s hold on pay-TV subscription revenue. “Currently, 80-85% of subscription revenue resides with cable operators. There is a need to reset this as broadcasters aren’t getting their fair share,” explained Gurjeev Singh, chief operating officer of Media Pro.

Last year India’s pay-TV subscription revenue amounted to INR 19,400 crore, of which just 20% went to broadcasters, according to the consultancy KPMG India. Pay-TV subscription revenue is forecast to grow at 17% a year to reach INR 41,600 crore by 2015 – by which point the channels’ share is likely to register a 30% share of subscription revenue, according to the analysts.

The industry may witness more carriage mergers, Rajesh Jain, head of media and entertainment, KPMG India told Live Mint. “Such joint ventures give synergies in distribution and cost savings. It ensures compliance from the cable operator and hence better rates,” he said. “Such collaborations also ensure a wide consumer base.”