Industry weighs in on whether Viacom18’s ‘free’ IPL streaming will pay off?

With no subscription fee for the IPL streaming, JioCinema will have to solely depend on advertisers for revenue, caution industry observers

by Kanchan Srivastava
Published - March 15, 2023
6 minutes To Read
Industry weighs in on whether Viacom18’s ‘free’ IPL streaming will pay off?

Viacom18, the digital media rights owner of the Indian Premier League (IPL), last month took a gambit by announcing that the tourney would be streamed free of cost on its JioCinema App for users across telecom networks.

With less than two weeks to go for the men’s league, which is expected to be India's largest streaming event ever with estimated 500 million people tuning in, the media and advertising circle is abuzz with varied opinions. 

JioCinema created a buzz when it decided to telecast the FIFA World Cup 2022 for free for viewers across telecom networks in India. The app is owned by Reliance Group’s media company Viacom18.

To put it in context, Reliance Jio is the largest telecom operator in the country with nearly 425 million users, as per TRAI’s latest report.

On Jio’s recent free-streaming offer, a media leader said, “With no subscription model for the IPL stream, Viacom18 will have to solely depend on advertisers for revenue that too at a time when advertisers have tightened their purse strings due to inflation and global economic concerns.”

It's noteworthy that Viacom18’s strategy is in stark contrast to the previous digital partner Disney+Hotstar, which used to offer IPL to paid subscribers only.

While Viacom18 claims that its free offering aims “to eliminate all barriers for IPL consumption”, the company’s move is being viewed as an attempt to take on rival Disney star, which would be the only broadcast partner of IPL for the next five years.

Early this year, Viacom18 bagged IPL digital media rights by shelling out Rs 23,758 crore for the 2023-2027 media cycle, almost similar to what Disney Star spent to buy TV rights for five years. This comes to around Rs 4,750 crore per year, for both the media partners of BCCI.

After committing roughly Rs 48,000 crore to the nation's top sports league, both Disney-Star and Viacom18 are vying for a share of estimated Rs 4,000-crore IPL advertising pie. After all, IPL is the most sought-after property for advertisers. 

“Recovering the cost may be an uphill task for both of them in this season. It wasn't so earlier since both the rights were owned by the same media house,” an industry player noted.

Digital ad inventory

The rate of ad inventory of digital platforms remains low compared to TV, which ranges from ¼ to 1/10 depending on the ad format. This is despite digital getting a large number of advertisers, including SMBs, say experts.

Moreover, Jio has kept its ad rate low compared to what Disney+Hotstar was charging till last season.

According to sources, JioCinema’s ad rates range between Rs 200-300 CPM (cost per thousand impressions). The ad rate for a Connected TV ad campaign is Rs 6 lakh per 10 seconds.

In contrast, Disney Star’s rate is Rs 16-17 lakh for 10-second ads as of now, which may go up during the semi-finals and finals.

Dr Sandeep Goyal, Managing Director of Rediffusion group, opines that Viacom18 would sail through since Reliance Group has deep pockets.

“Reliance Group must be having a long-term perspective on investments. Jio can afford to experiment with different models. That said, a self-serve model for advertisers could open up the floodgates for even small to medium advertisers,” he pointed out.

According to Dr Goyal, “Jio’s experiment could change the digital landscape quite considerably. A much larger number of advertisers with tiny budgets could make a beeline to the digital IPL streaming. Apertures of opportunity are manifold.”

As per Jigar Rambhia, COO, SporJo, “Viacom18 should attract a good number of sponsors for sure. Whether they will recover the costs or not, only time will tell.”

Some experts call it a customer acquisition strategy for Jio. Rambhia agrees, “I guess this (free streaming) will only help increase the reach of the property which is a very good thing.”

He further said that if users want to watch the property and if it’s free and they only have to pay for data, then I believe it’s a win-win for everyone. Ultimately, we need to pay for good quality content whether it's via platform fees or via data costs.

I guess all kinds of advertisers will explore this option. There is no reason for any particular sector to look at only digital.

How many Indians could afford data cost?

Watching a three-hour IPL match on mobile phone and connected TV would require 3-10 GB data depending on mobile specification, video quality (SD, HD, 4k) and data speed (3G, 4G, 5G), experts shared.

On average, the cost of one GB data in India is Rs 14, which means a viewer will have to pay anything between Rs 28 to Rs 140 just to watch one match of IPL. For the entire tournament of 74 matches, the data cost could go up to Rs 2,000 to Rs 10,000.

Speaking with e4m last month, Viacom officials had disputed claims about data usage and cost. They insisted that an average user would need just 2 GB of data to watch IPL. They also stated that most viewers would not watch a full IPL match but a portion of it and so data cost will not be an issue.

Viacom18 didn’t respond to questionnaires on ad rate, data cost, and their strategy to recover the investment cost.  An email shared with them remained unanswered till the time of publishing.

Days ahead of IPL, Reliance Jio on Tuesday introduced a new set of Post-Paid Family Plans – Jio Plus -which will allow a family of four to try its 5G services absolutely free of cost for a month.

The new plan launched Tuesday starts from Rs 399 ranging to a total monthly charge of Rs 696 for a family of 4, that comes to just Rs 99 per additional member. The plan can be cancelled, if the user is still not satisfied with the value proposition.

Jio said in a press release that it was committed to providing transformational benefits, such as unlimited True 5G Data, through the Jio Welcome Offer, single bill for the entire family, data sharing, premium content apps, and much more.

“The idea behind launching Jio Plus is to offer exciting new benefits and experiences to discerning post-paid users. Jio has further strengthened its network experience by expanding True 5G to 331 cities. After having serviced over 430 million customers, there cannot be a more opportune time to welcome millions of new post-paid customers,” said Akash M Ambani, Chairman, Reliance Jio Infocomm.