IPL 2023 is on us. This is the first time that the coveted cricket league would be streamed on Viacom18’s OTT platform JioCinema, which had acquired the digital rights of the tournament for a whopping Rs 23,758 crore last year.
Viacom18 recently announced that IPL 2023 — just like WPL 2023 — will be free to watch on JioCinema, much to the dismay of media analysts. They reckon that a free-to-view IPL is not only bad news for Viacom18, but also for India’s OTT sector at large.
“It would be difficult for them to recover even 30-40 per cent of IPL’s content acquisition cost via the digital route if it is free in the near term (the next two years). JioCinema offering IPL free will [also] be a big negative for ARPUs of other OTT platforms in a market where most of them are already available at cheap prices versus global averages,” said Karan Taurani, SVP at Elara Capital.
IPL happens to be the most expensive sports IP in India, with its broadcast and streaming rights split between Disney Star and Viacom18 for the 2023-2027 period. JioCinema’s decision to make IPL free has also compelled Star to make 12 key matches (including the playoffs) available across its free-to-air (FTA) channel Star Utsav, at a time when India’s pay TV households are already declining 3 per cent annually.
“JioCinema has pushed the linear TV broadcaster to make IPL free on FTA in order to combat the higher viewership/reach number. We hope that this free offering on FTA stays only for a few matches going ahead, and does not extend to more matches, as it will be a big negative impact for monetisation of the most expensive entertainment IP in India,” Taurani explains.
Star, incidentally, had paid Rs 23,575 crore for the five-year TV rights of IPL — a cost it might increasingly find difficult to recover given the slowdown in television advertising and ad dollars moving to digital. In fact, a report by Media Partners Asia projects that JioCinema will grab 60 per cent of IPL 2023’s total ad sales, and digital ad revenue will surpass TV ad revenue for the first time.
Per MPA estimates, Star India’s IPL 2023 ad sales would be in the range of $200-220 million, whereas JioCinema’s ad sales could touch $330-350 million. “IPL incumbent rights holder Star has struggled to withstand Jio’s onslaught as well as a challenging macroeconomic environment,” MPA stated in its report.
However, sports events continue to clock more time spent on TV than on digital. “We believe that time spent and consumption of matches will remain high on TV, as digital will primarily be convenience-led and on the go viewing. IPL on digital may get a larger number of viewers or reach, however, time spent compared to TV remains much lower,” according to Elara Securities.
JioCinema, meanwhile, has launched an aggressive IPL ad campaign featuring MS Dhoni where it compares the merits of streaming a match with the demerits of viewing it on television. JioCinema expects IPL 2023’s digital viewership to go north of 500 million — a number it has been pitching to advertisers. This is a higher estimate than what Hotstar attracted, given IPL was behind a paywall on its platform. “We hope the JioCinema offering too comes behind the paywall next season onwards, as pure ad monetisation opportunities don’t support the high content cost, which makes business economics unviable,” Taurani stated.
However, the short-term positives of a free IPL for JioCinema cannot be denied. After a successful FIFA World Cup 2022 and WPL 2023, the platform could push its subscriber base to a new high with IPL 2023. This could eventually put JioCinema on par with YouTube, which remains India’s biggest video-streaming platform with 520 million monthly users. A large user base would also allow Reliance Jio to cross-sell its other services to subscribers.
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