Media rights for the Indian Premier League is now shared between Disney Star and Viacom18 and the acquisition cost has gone up from Rs.8,200 crore (for nine years) in 2009 to Rs. 48,390 crores (for five years).
The surge in cost of media rights has impacted ad rates which has increased, according to sources, from 3.5 to 4 lakh per spot in 2009 to 16 to 18 lakh for the upcoming season in 2023. Being a near monopoly enabled the broadcaster to command premium ad rates from advertisers as they were competing to encash the high impact reach and viewership assured by IPL. Not anymore.
IPL 2023’s media rights are split between Disney Star and Viacom18, that will result in viewership being split between Star Sports (TV) and JioCinema (Digital). With media reports revealing JioCinema’s intention to stream the IPL content for free, it is likely to result in migration of viewership from television to digital as the digital ecosystem in India is conducive with 5G mobile data and cable homes fast adopting CTV.
Star Sports and JioCinema are hence gearing up for an unprecedented challenge of attracting eyeballs and advertisers to realise the returns on their huge investments.
Can Star Sports which is looking to sell its ad spots for Rs.14 to 16 lakh per 10 seconds withstand the onslaught of JioCinema which is offering free content and affordable advertising options?
The media and advertising fraternity is eagerly awaiting the verdict, which might alter the ecosystem permanently.
MediaNews4u spoke to industry experts to analyse the impact:
‘Major ramifications for the sports ecosystem’
Recently we’ve seen drying up of investor funded advertising money, disappearance of tech startup money, drying of Mobile Handsets on TV, Ecom underspending etc.. In 2022, the number of cricket playing days involving India was higher, add world cup T20 and FIFA World Cup to this-it made just finished bilateral series less desirable.
Corporate advertisers are cautious in spending money on back of tepid results in previous quarters. That may lead to slowdown in advertising on sports as well.
Jio Cinema’s decision to offer for IPL for free will have major ramifications for the sports ecosystem. Its going to open entire Jio ecosystem for public to watch IPL for free.
Disney+ Hotstar’s SVOD numbers are small as compared to future free Ecosystem of Jio. Making IPL free will widen the overall viewership base and will bring in new audiences. It will also bring value to digital advertisers since they can reach a wider audience through targeted advertising.
TV will also remain an important medium to advertise, because of lag and quality of broadcast but Disney Star will have to bring down the ticket size required to advertise on IPL if they were to start recovering the bid price of 23 billion rupees. Smaller ticket size would help bring in new advertisers. That will help advertisers to do tactical advertising during IPL on TV.
For advertisers, it makes sense to use IPL for impact and then advertise on GECs, Movies, News, Music to build frequency. It doesn’t make any sense to put all our eggs in one basket (read IPL).
– Rajiv Dubey – Head of Media, Dabur
‘Both TV and digital will have a role to play’
JioCinema is emerging as the new buzzing media platform with chart-topping performance in terms of downloads and streaming.
During the FIFA world cup in November and December 2022, Jio saw a spike in monthly active users to 32 mn. This was all thanks to the event. The current numbers are again back to under 2mn active users. Since there was no choice for the digital platform audience, everyone had to come in for JioCinema streaming. The exclusivity of the rights enabled the platform grow during the marquee event.
The IPL audience is huge any which way. No one loses out in the game, honestly.
By airing it free, Jio is democratising it even for digital viewer. Though, JioCinema is free, it may dent TV viewership marginally.
To say that the TV audience will be moving completely to digital would not be correct. The audience watching cricket on television will continue to subscribe to the channel. The current subscription for Star Sports is under Rs. 50.
Just hoping the Jio teams have learnt from the feedback during initial days of FIFA, where audience complained about the quality and experience of JioCinema.
Last year, both TV and digital viewership on the tournament saw a dip vs the year before. It would be interesting to see the play out between free digital platform vs TV paid (reverse of what used to be case few years back).
Ad rates would purely depend on the flexibility, targetability and innovative engagements that Jio will bring to advertiser to reach the required audience.
– Jasmine Sachdeva, SVP, Zenith
‘Viacom will have to work harder to meet advertiser expectations’
Keeping with its disruptive style, Jio will aim to create an inflection point by offering free live streaming for the first time in the history of IPL viewing.
JioCinema has already announced itself as the go-to sports destination by live streaming the FIFA world cup, La Liga and the SA20 T20 league. IPL has not only set the stage for JioCinema to topple Hotstar from OTT leadership but also draw audiences from Star Sports. If JioCinema can overcome the streaming issues faced while live streaming FIFA and handle the much-heavier traffic that IPL will attract, it will certainly impact TV viewership.
While Star network had the advantage of bundling TV and digital feeds for advertisers, both from a pricing as well brand placement perspective, Viacom will have to work harder to meet advertiser expectations.
IPL has been a major source of revenue for Disney+Hotstar and Star Sports alike. Both platforms will be impacted and lose subscribers. TV viewership in the last season dropped. Marketers sense softness and a good opportunity to bargain, impacting ad rates.
– Shrikant Shenoy, AVP – Strategy, Lodestar UM.
‘TV might struggle a bit in filling revenue gap’
There have been considerable drop in IPL TV viewership. The heavy viewers who spent more than 1200 minutes watching IPL have come done over the years by almost 65%. Even on digital, the average viewership is just around 60% of the peak concurrent viewers. Having said that, the reduction in the number of pay-tv homes and free access to IPL online will create a significant shift in the ad revenues this season. Although viewers may come back to TV during the play-offs, I feel TV might struggle a bit in filling the revenue gap. Interestingly, broadcast rights his year for both TV and digital were priced almost equally, For Jio with deep pockets it is a smart game and the right way forward in their super-app strategy
– Yesudas S Pillai – Founder and CEO, Y&A Transformation and Channel Factory
‘A new wave of growth in CTV can be seen with IPL on JioCinema’
Cricket has always been known for community viewing and the fun of catching the action on the bigger screen. TV always had that advantage on digital for that reason. However, with not every household being able to manage the subscription costs for either TV (Star sports in this case) or Hotstar, there is a tremendous headroom for growth to bring in newer audiences thru digital, which is where JioCinema is likely to experience disproportionate growth. Further, with the explosion of CTV, we could see a new wave of growth on CTV on JioCinema, despite it being a largely metro phenomenon.
IPL has traditionally been a platform which has seen brands creating their campaigns around IPL, and brands launching / making it big on IPL. Keeping this in mind, it’s safe to say the lure of being present on IPL would not fade off resulting in money continuing to flow in on IPL. However, the new regime of split rights between Star and JioCinema could see the reset button being activated at both ends. While Star would look at consolidating its position as TV broadcaster of IPL, JioCinema would look to quickly establish itself as the go to destination for sports on digital. Both of them would look to strike a balance between establishing the rates in the new regime of split rights and to get more than a fair share of the advertising pie. Finally, between Star and JioCinema, who gains more will be dependent on who hits the sweet spot from a pricing point of view.
– Srinivas Rao, Head – Chief Investment Officer, Wavemaker India.
Advertisers are willing to bet on Star Sports for the quality of coverage and superior experience of IPL 2023. That said, they are cautious about the free content streaming from JioCinema and its skyrocketing reach witnessed during the FIFA WorldCup. Indian subscribers are known for their loyalty towards free content and a free streaming offer will surely result in meteoric rise in digital viewership. The free streaming of IPL will see unprecedented proliferation of IPL viewership in digital in Tier II, III towns and rural areas. Even media dark regions in Hindi heartland and North East will add to swelling numbers. Advertisers may have to do a rethink in the middle of IPL 2023 based on the viewership numbers and be ready to bet their monies on winning platforms.