IPLdigital rights will also have a positive effect on Reliance’s telecom offering and content ecosystem.
- Reliance acquired the digital rights from IPL for ₹23,800 crore, which is ₹200 crore more than what Star Sports India paid for the exclusive TV rights.
- India’s sports sector – comprising media rights, clothing and more – could grow fivefold to $100 billion in the next five years.
According to research firms Bank of America (BofA) and CLSA, the digital IPL rights could also positively impact Asia’s richest man Mukesh Ambani, led by Reliance’s telecom offering and its content ecosystem, along with its OTT offering.
“If marketed appropriately, we think Jio has the potential to rip users off telecom competitors to watch the content. Aside from IPL, we think RIL also looks at movie content as the combination of ‘Cricket+ Bollywood’ would help to generate more revenue,” added the bofA. However, there are arguments that while IPL rights add the potential to increase the number of active users, little is known about their impact on overall revenue.
Asia’s richest man, Mukesh Ambani-led Reliance, acquired the digital rights to IPL for ₹23,800 crore ($3.04 billion), which is ₹200 crore more than what Disney-owned Star Sports India paid for the TV-exclusive TV exclusive. rights.
Disney-Star had the contract for both digital and television rights in 2018.
$100 billion in the next five years.
Viacom18’s Voot is at the center of it all
Voot, Viacom18’s video streaming service, is currently one of the minor players in the Indian OTT ecosystem, with only 2% of the market share. While the IPL rights may not be enough to dethrone the market leader player like Disney+ Hotstar of its 26% market share, it is enough to cause a significant dent in its number of IPL over the next five years.
Hotstar, even before it was acquired by Disney in 2019, drew most of its audience through cricket game streaming services. Disney+Hotstar — available in India and Indonesia — reported revenue of ₹1,721 crore in fiscal 2021, with cricket accounting for 80% of that as
per former Hotstar executives† This year, the company gained four million subscribers in the quarter from January to March thanks to Disney Star’s association with IPL.
Viacom 18’s OTT VOOT lags behind and the loss of digital IPL rights will be a major blow to Disney Hotstar, CLSA said.
With the media rights coming to Viacom18, Reliance could make an effort to increase its revenue through advertising or a subscription model. The potential of advertising is increasing as impulsive purchases of trade and food usually increase during the IPL season and are expected to increase even more in the near future. “TV advertising rates will be about 10% higher and digital rates will be about 30% higher,” said Karan Taurani, senior vice president of Elara Capital. Notably, IPL advertising revenues have nearly tripled to 4,000 crore in the past five years and make up 50% of the total sports advertising spend in India, according to CLSA.
In addition, Jio Platforms could monetize their IPL digital rights by charging an annual subscription fee of 20-80 from its customers who want to watch the cricket league without any disruption, BofA noted. Disney+Hotstar is known to have followed a similar model in the past.
Even JioFibre, Jio telecom and other Jio Platforms are expected to benefit
Jio Platforms, the digital enterprise of RIL, owns multiple consumer platforms, including TV streaming app JioTV and video-on-demand JioCinema to name a few, which simply has the potential to diversify content even further. and therefore also powers the monetization engine.
It is the vast portfolio of services and apps offered by Jio Platforms that analysts expect to see Jio telecom’s subscriber base grow. In particular, Jio’s mobile arm would act as the exclusive digital distributor for the IPL rights.
Broadband services JioFiber – which also allows users to stream content – also falls under this mix and gives the company the ability to step into TV screens in the blink of an eye. BofA believes that Jio’s improvement in the rollout of fixed broadband in the coming years could further improve monetization than mobile screens to smart TV audiences, where the average revenue per user (ARPU) is higher than that of mobile phone services.
CLSA believes that Viacom18’s digital rights gains could significantly increase Reliance Jio Platforms’ content pool, and that digital rights exclusivity could boost Reliance Jio data subscribers. Confidence Jio has
over 35% of India’s mobile users and was the largest telecom service, as of April 2022.
“We value Jio Telecomentity (₹826) at ₹5.6 lakh crore and advertising and trading potential for Jio digital opportunities (₹160) at ₹1.08 lakh crore (at 2-year fwd avg P/S multiple for peers),” BofA concluded.
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