The new era of sports broadcasting is upon us, and I’m not surprised it’s been ushered in by cricket. The IPL media rights for the 2023-2027 period have been sold for a whooping Rs. 48,390 crores. The media rights were divided into four packages. Package A was for the TV rights in the India and Package B was for the digital rights for India. Packages C and D were for non-exclusive digital rights for India and Rest of the World media rights respectively.

The simultaneous bidding process won Disney Star India the rights to package A for Rs 23, 575 crores while Viacom 18 and Times Internet won the rights to package B and C for Rs 23, 578 crores (Rs 20,500 + Rs 3,258 crores). Package D was won for Rs 1058 crores. The total outlay of Rs 48, 390 crores make IPL second most premier sporting property across the globe, trumped only by the NFL in the US. This figure also marks a three-fold increase in revenue compared to the Rs 16,347 crores received by the BCCI in 2017. This is also the first instance the media rights have been split across multiple broadcasters, ending Disney Star India’s monopoly in this space.

There has been rampant speculation regarding the return on investment and the ability of the broadcasters to recoup the funds invested. However, in a country dominated by Cricket, I doubt the broadcasters will struggle to find traction. Statistical data shows that the highest return on investment with regards to sports related advertising is cricket. There is no reason to suggest this will change in the immediate future. Even with the emergence of other prominent leagues such as the ISL and PKL, the aces in sports advertising continue to be held by Cricket.

Add into the mix the upcoming Qatar FIFA World Cup towards the end of the year, the early movers who sign up to their subscription package immediately will reap the benefits of two mega sporting events at least for the next calendar year.
Could this be the growth journey for Viacom 18? Of course, in order for Viacom 18 to be able to breakeven in the long-term, they will have to raise their subscription costs. However, this should only happen once they have been able to onboard enough users in the short-term (next 2 years) to create a formidable viewership base on their OTT platform, Voot.

Furthermore, the presence of Reliance Jio and its existing telecommunications user base will most likely be able to access the same sports content through the Jio app, effectively killing two-birds with one stone by increasing revenue across both platforms.

I expect Viacom to also heavily invest in developing its all-round content to ensure that the platform can convince and retain users for the long-term subscriptions instead of periodic subscriptions focused around the IPL. In the short-term the periodic subscription strategy can also be used as a sampling process to provide users with a feel of the platform with the objective of eventually converting them into long-term subscribers. Considering that most OTT platforms in today’s day and age almost always provide a month’s content for free, this would be a no-brainer. Incentivising users for subscribing to a year-long plan, predominantly by proving discounts will be a part of the subscriber onboarding strategy.

Multiple OTT sponsorships have become a norm in today’s digitally driven era. Although a section of the existing Hotstar subscriber base is expected to migrate across platforms, the more avid sports fans will be looking at a third subscription investment, after Hotstar and Sony Liv. The comparatively lower pricing for Voot should help engage viewers from Tier 2 and 3 cities as well. Furthermore, compared to the cost of a TV subscription and the finances/logistics required, expect the digital platform to see an increased viewership over the next few years. Looking at it from a purely demographic perspective, the young population staying away from home will prefer the OTT subscription compared to TV.

The overall financial pot will be split evenly by the BCCI with half the money going to the ten existing IPL franchises. In both cases, a section of the funds should be channelled towards the grassroot development of the cricket, helping identify and nurture talent throughout the year. This would include operational expenses, scouting, infrastructural development and nutrition, strength, and conditioning. In the long run these investments will help the country produce a diversified talent pool who can perform for the national team at the highest level across global cricket events.
The questions which will seek answer over the next few years are:
      •  What will print brands do to get a pie of the IPL media spends?
      •  Will GEC on TV get impacted by the IPL media spends?
      •  What will be the impact of IPL on regular digital advertising on FB, Google and the like?
      •  What if IPL fails to deliver the viewership that is expected?
      •  Could there be fatigue due to excessive cricket?
Only time and data will provide answers to the above. To me, this is only a beginning. The end is a long way off. The journey is going to be interesting with twists & turns.
Anushrav Pramanik
MS (Sports Business & Innovation)
Loughborough University, UK
Consultant-Professional Management Group
Mumbai