Mukesh Ambani’s group eventually abandoned the pursuit of television broadcasting rights in India’s top cricket league, which was acquired by The Walt Disney Company for $3 billion as the Indian conglomerate saw limited opportunity for long-term profit from the legacy platform.
The joint venture between Ambani’s Reliance Industries Ltd and American media giant Paramount Global instead focused on winning the rights to digitally stream the lucrative Indian Premier League, betting that its advertising revenue exceeds that of TV in five years. would be four times larger, said a person familiar with the group’s strategy. The idea was that television would struggle to deliver double-digit growth, according to the person, who did not want to be identified, discussing private discussions.
While Viacom18 Media Pvt, the Ambani-Paramount joint venture, bid for the TV rights in the early stages of the auction, the person said the focus was always on ensuring that it secured the digital rights. A representative of Reliance Industries declined to comment on the auction strategy.
Viacom18 paid 238 billion rupees ($3.1 billion) for the rights to stream the IPL tournament, one of the world’s most-watched sporting events, almost equal to the amount Disney had done. The decision goes to prison along with Ambani’s ambitions for his digital unit Reliance Jio Infocomm Ltd. The billionaire, currently India’s richest man, wants to create a consumer ecosystem that marries entertainment and e-commerce to entice local users who are increasingly connected to their smartphones.
The decision to give up the television rights saved Reliance billions of dollars, money that could potentially be used to boost the group’s prospects in India’s upcoming auction for 5G spectrum. A prized cricket broadcast that can connect millions of subscribers, streamed over a fast wireless network, can be a powerful amalgamation for Jio turbocharging.
Utkarsh Sinha, Managing Director, Mumbai-based Bexley Advisors said, “The Jio DNA at Reliance gives them the foresight and conviction to stick with customer acquisition strategies.”
Jio debuted in 2016 and stoked the competition to emerge as the top telecom player. “They go for absolute dominance, and IPL has historically proven to be one of the most reliable properties”, Sinha said, adding clingy consumers to an OTT platform.
pivot for streaming
Board of Control for Cricket in India chief Jay Shah said in a separate interview that the country could see 90 million internet users in five years, underscoring the potential of digital rights. While TV was the main source of entertainment in Indian middle-class households, the past few years have seen a rapid pivot towards online streaming – a trend that has been exacerbated by the pandemic.
This person said that Reliance will use its IPL rights as a strategic asset to build streaming and digital platforms including Voot, Jio and others. Viacom18 has already acquired media rights in football, badminton, tennis and basketball events, giving it a diversified portfolio of sports properties.
According to Jay Lala, CEO of media consultancy Zenith, the streaming rights of IPL will further advance Viacom18’s position in the local OTT market. “This will help Viacom18 capture better market share from its current No. 4 position, but it will need to create enough content to engage customers when cricket matches are not there,” he added.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.