Raising the stakes

A look at Viacom18’s sports-driven strategy and its implications

September 11, 2023 08:31 IST

Viacom18 is far better placed as JioCinema will stream both IPL as well as BCCI games

Media company Viacom18 recently bagged the exclusive media rights for BCCI (Board of Control for Cricket in India), underscoring its ambition in the live sports broadcasting space. It followed that up with another big announcement about scooping up the media rights for the Indian Super League (ISL), the country’s top-tier football league, across digital and linear TV for the next couple of years. Aside from BCCI and ISL, the network currently owns media rights for IPL (digital), WPL, Olympics 2024, NBA, LaLiga, World Athletics Championships Budapest 2023, MotoGP and several more.
Though Viacom18 didn’t respond to queries from FE, the opportunity is apparent.
As per GroupM ESP, sports spending on TV reached Rs 5,506 crore last year, while digital stood at Rs 2,045 crore. Cricket commands the lion’s share of the spending, well over 80%. Industry experts believe that Viacom18 could earn upwards of Rs 3,800 crore from its sports properties. IPL alone is expected to command around Rs 2,800 crore, while WPL and BCCI rights will earn a projected Rs 800 crore combined and ISL another Rs 200 crore.

Santosh N, managing partner, D&P Advisory, observes that while live sports content boosts a network’s appeal among viewers across markets, cricket properties are easily the strongest in India. Within cricket, there are three critical media rights that broadcasters compete for – IPL, ICC events rights and the BCCI home international and domestic games. “Since Viacom18 had only digital rights for IPL and doesn’t hold ICC tournament rights (held by Disney Star), it was important for the network to get complete media rights for BCCI. This ensures that it has decent cricket content. IPL is just a two-month-long property but with BCCI, the platform will be able to offer regular content,” says Santosh.

Of all the three rights, the BCCI ones are perhaps the laggard in terms of viewer and advertiser interest. Over the last five years or so, the growing popularity of the 20-over format has resulted in waning interest in bilateral tournaments. That is why, Santosh believes the other broadcasters were not as aggressive in their bids for the BCCI rights.

Noting that the network’s aggressive moves in the cricket broadcast space will make waves in the media and advertising ecosystem, Vinay Babani, VP, marketing at SRV Media, says, “Viacom18’s expanding portfolio is not just boosting their market presence, but is also giving them the upper hand in setting advertising rates and prices. On the OTT front, the company’s disruptive move to make IPL free on JioCinema was a game-changer and put greater pressure on linear TV.” Noting that Viacom18’s ad strategy will now be as crucial as its content strategy, Babani adds that the network may potentially have changed the way content is consumed and monetised. Experts add while premium sporting events result in losses or wafer-thin margins for broadcasters, they are crucial to build a strong subscriber base, offering better leverage with advertisers.

Taking on competition
Though Viacom18 has upped the ante on its content offerings, the network is behind current market leader Disney Star that hold a massive 33% market share in broadcaster ad revenues (FY23, Elara Capital). It is followed by the Sony-Zee combine with a 25% share. Viacom18 is still at about 8%.

According to Karan Taurani, senior vice-president at Elara Capital, BCCI rights are not on a par with either IPL or ICC rights in terms of ad revenue potential. He explains, “The pricing on these tournaments are at a massive premium since they are either one-day games or 20-over innings matches. BCCI’s bilateral series often also include test matches, where the pricing is discounted. ” Currently, nearly 70% of the cricket ad spends in the country are on IPL and so Taurani remarks that unless Disney Star loses the TV rights for IPL, it will continue to lead.

On the digital front, Viacom18 is far better placed as JioCinema will stream both IPL as well as BCCI games. It is also in the process of building a non-sporting library.
As per Ampere Markets (Q1 of CY23), Disney+ Hotstar still commands a 40% revenue market share in the SVOD (subscriber video on demand) segment, followed by Netflix at 17% and Amazon Prime Video at 16%. Despite subscriber declines, Disney+ Hotstar leads the subscription market share at 29%. Taurani points out that Viacom18 is clearly looking to strengthen its play in TV. He says, “Having acquired both TV and digital rights for BCCI, Viacom18 can make the best possible use of the acquisition and avoid the competition that was seen during the IPL. Further, when one platform gets both rights, there are better efficiencies and better monetisation opportunities.”