Last year there was hectic competition going on between Disney India and Viacom18 to get IPL ad revenue. For the first time the rights to the most valuable property on Indian television got split with Disney-Star India retaining the broadcast rights but seeing Viacom18 pay a premium for the digital rights. The question is whether the expected merger between Disney-Star India and Viacom18 will minimise the IPL rivalry between digital and television.
According to Karan Taurani of Elara Capital, the Viacom18 and Disney-Star India deal is the need of the hour. The merger will help grow IPL’s ad revenue. The advertiser’s bargaining power will come down.
“When TV and digital rights were split between two platforms, there was a situation when revenue monetization from TV declined sharply because of the ad environment being volatile for TV in general, and consumption happening on digital. Secondly, at the cost standpoint, both TV and digital were on par. The bargaining power moved in favor of advertisers because they get to choose between TV and digital. Putting TV and digital under one umbrella is a win-win proposition, as the bargaining power will move back to the platform. The platform can charge premium pricing; then the advertisers’ bargaining comes down because, if at all, they want to advertise in a large impact property like IPL, they have to do that, as mentioned earlier TV and digital will be under one umbrella. Definitely, this deal is going to help drive some positive impact on the overall IPL revenue if TV and digital come under one platform,” Taurani said.
Jyoti Malladi, Managing Director, Research, Ipsos India believes that the association will certainly help with the IPL rivalry with access to TV rights following Viacom’s acquisition of the India leg of the Disney business.
“With digital rights last year, Viacom opened up to a wider viewership through the AVOD route alone without any subscriptions. With the addition of TV rights through the Disney acquisition in India, this is slated to only go up. With this, Viacom will have access to both the digital and TV rights for the next IPL with enhanced viewership – in-home and out of home and across viewership occasions – in the company of friends and family or solo viewing,” she added.
“The deal will have long-term benefits. When the future bids for sports events come, one of the big serious players is out of the game. If you look at the last cycle of bidding, Zee, Sony, Disney, and Reliance were players in it. If you move two big players from the list, what it does is it will create a long-term advantage for Reliance. The Viacom18 and Disney India deal will make sure that other players are out on a permanent basis. There are strategic advantages not just in the case of sports content but regarding the entire content ecosystem,” said an industry watcher.
“Fundamentally, as I have seen and experienced in the past, as long as the different media assets are structured as independent businesses within a multimedia organisation, the so-called ‘rivalry’ will always exist,” observes Yesudas S Pillai, Founder, Y&A Transformation.
“Digital and TV rights are sold separately by BCCI. And the bidders have acquired it knowing fully well that the bid value plus profits on each asset is their only reason to exist. We have also experienced a scenario earlier when digital and TV were under the same entity, and they clearly chose to keep it separate. I don’t expect any dramatic changes to that,” he adds.
According to Pillai, considering the magnitude of the investment, what advertisers can perhaps expect is more collaborative advertising options which bring them more value, of course at a higher investment because advertisers who have bought the options individually in the past already have established rate benchmarks.
“I feel the digital push by Jio in the new season once the threshold inventory is sold would also be to increase the number of advertisers even going locally, geo-fenced activities. So essentially, they will both follow their own strategy with some collaboration for high-value advertisers,” he adds.
Mitrajit Bhattacharya, Independent Consultant and Content Producer says that Viacom18 and Disney India should remain competitive to drive better overall numbers.
“The merger’s effect on unified action in the market may take some time,” he concludes.
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