Mukesh Ambani has to change the rules of the IPL game - which is losing eyeballs

• Last month, Mukesh Ambani’s Viacom18 won the digital rights of the Indian Premier League for the next five years, beating Disney Star to the punch.
• Reliance will now have to foot a hefty bill for content production, media acquisition, marketing costs, and other hosting expenses.
• On top of that, viewership of the recently concluded IPL season 15 fell by 30-35% in the first four weeks compared to last year’s figures.
• With decreasing viewership numbers and television taking the bigger piece of the viewership pie, experts tell us if Reliance will get its bang for the buck.

India’s richest man Mukesh Ambani is banking on India’s most valuable sporting property, IPL, to build his content and telecom empire. But, IPL’s fallen victim to a 15-year itch and suffering from consumption fatigue.

As per a recent survey conducted by consumer data intelligence company Axis My India, only 25% of Indians watched IPL this year, and even among those who watched it, 65% watched it on TV. Only 29% said that they have watched it on digital platforms.

Less than a third of the smaller part of a shrinking pie is what Ambani is left with as the days of people taking sick leaves on IPL days are long behind it.

On the contrary, Viacom18 paid a record ₹23,750 crore last month to bag two and a half bundles of IPL’s media rights. It beat Disney Star to win the package that includes digital, non-exclusive digital rights and a few international countries. It sounds like a lot of money has been paid for something that’s not a hot property anymore.

Even those who watched IPL, watched one or more matches this season. IPL season 15’s television viewership fell by 30-35% in the first four weeks compared to last year’s figures.

“One can witness respondents suffering from consumption fatigue which could be related to the innumerable choice of content, ease in mobility and the availability of experiencing ‘cinema’ etc. The craze around IPL persists across platforms but whether this excitement justifies its high media rights, time will tell,” said Pradeep Gupta, chairman and MD of Axis My India.

A TV every home but a mobile on every hand

Girish Upadhyay, the CMO of Axis My India however is more hopeful as rural consumers are watching IPL on mobile because of cheaper data and power cuts.

“There is a bigger play that Reliance’s Viacom is looking at,” he told Business Insider India. He believes that IPL will give new users to Viacom + Jio combination, giving them a significant edge as they scale up their platforms.

“These new viewers can help build the subscription revenue for the GEC, movies, and original content library they have, hence IPL can’t just be looked at in isolation. IPL has never been just about numbers in terms of ratings, the kind of impact, engagement it gives brands is unprecedented,” said Upadhyay.

But a CLSA report calculates that for Ambani’s Viacom18 to break even and equate to their bidding cost, its advertising revenue will have to grow by 57%. However, experts are banking on Reliance’s spectacular strategies to push forward in a game where it is a laggard.

N Chandramouli, CEO of research firm TRA said that if television has reached every home, a mobile phone has reached every hand.

“That’s what makes the digital rights of IPL so exciting for Reliance. We must remember that today, viewing has become a personal experience and not a family experience. While the young children may be watching IPL on their phones or laptops, the parents may be watching the news on TV,” said Chandramouli.

Voot to become a bigger fish in the sea?

In the landscape of digital streaming, MX Player, Disney+Hotstar, Amazon Prime occupy the largest share of the market and Viacom18’s Voot is at a distant 2%.

Chandramouli said that Reliance is more likely to get its ‘bang for the buck,’ since it will grow the Voot paid subscriber audience significantly. This is the same price game that Reliance played when they entered the telecom market as the fourth player. They gave their mobile subscriptions for free for three months to grow into the largest player in the market. Six years on, it’s still the operator which provides the cheapest data.

The same thing is happening to the OTT offering as well. It’s the cheapest OTT in the market which is about to get a blockbuster property – even if its popularity is waning. The digital rights acquired by Reliance is for five years and experts estimate it will start paying off from the third year onwards.

“Whether the competition likes it or not, Reliance does tend to change the rules of the game in the sectors it operates in. Since Jio subscribers will also have viewing rights to IPL, the win is also likely to grow Jio customers. No other OTT player has such synergies, which gives Reliance an advantage at multiple fronts to gain from the IPL win,” said Chandramouli.