Picture this: It is the spring of 2023. The country, and most of the cricketing world, is getting engulfed by that tsunami called IPL. Rahul, a huge fan, gets out of his office and tries to catch the first day’s match online. He logs into the Hotstar app on his mobile and realises IPL has moved to Voot, Viacom’s digital platform.
Viacom has successfully bid for the digital rights at the recently concluded broadcasting rights auction for IPL, for the next five seasons for a mind-numbing ₹23,491 crore.
We are trying to estimate the advertising revenue for the lifetime of the rights that Viacom has earned. The calculations are based on the 2022 numbers with an assumption of 10 per cent y-o-y growth. An average IPL game had 3,300 seconds of advertisement time, which means around 330 ads of 10 seconds. Each ad fetched ₹14-15 lakh, giving a total of approximately ₹49.5 crore per game.
To command the ad rates, the OTT platform will need subscribers, and currently Voot is a bit short on that front. It is also light on cricket content. As on date, most cricketing properties are owned by either Disney+ Hotstar or SonyLiv. Voot has only two events — the Road Safety World Series and the Abu Dhabi T10 league.
To make the subscribers stick, the platform needs to offer much more than a two-month (or two-and-a-half month, in future) IPL. Something that Hotstar has done successfully by owning all the India series — Ranji Trophy, Deodhar Trophy, South African Cricket, and Tamil Nadu and Karnataka Premier Leagues. Plus, a bunch of other cricket content shown on the Star Sports network.
With most of the existing rights already belonging to Star and Sony, getting rights for fresh content could be immensely critical — especially with the ICC rights up for grabs in a few days. If Viacom goes ahead and bids for that too, then getting the subscribers to stick will be much smoother.
Also, global leagues can gradually shift to become compatible with Indian broadcasting times — thanks to the sheer interest for cricket in India. And the fact that 70 per cent of global cricket revenue comes from India (South African timings are very Indian viewer-friendly, no wonder Hotstar has the rights for it). It will be interesting if Viacom contests for a share of this revenue. As that can go a long way in netting more users and ensuring stickiness.
Inability to latch on to ample content can adversely affect its pricing and enjoying higher subscription fees. It may have to peg it below the ₹500 mark (the annual membership is currently pitched at ₹249 while promoting Bando Mein Tha Dum, India’s 2020 triumph in Australia). Lack of paid subscribers will create a domino effect on the advertising revenues, as brands may not make a beeline for a platform with a low subscriber base.
Hotstar can afford to charge high rates (₹14-15 lakh) per slot solely because it has a subscriber base of around 50 million.
Extraneous factors
Finally, there are extraneous factors that can take a toll on the prospects of Viacom. Take title sponsorship. We have had three sponsors over the last four years — Vivo, Dream 11, Vivo and Tata. The brand recall and brand association with IPL needs time — DLF and Pepsi were there for five years each and ‘DLF Maximum’ still rings a bell.
The BCCI will need an established corporate brand (or a start-up with deep pockets) to take up the title sponsorship. This issue may ring in the return of the traditional businesses — banks (deposit rates have increased), automobiles, FMCGs, universities (Lovely, Amity, etc) for ad slots. All these sectors need “bankable” cricket stars, but Sachin Tendulkar is selling used cars on Spinny. At the same time, the ads might also face “stardom” issues. MSD (M S Dhoni) is at the fag end of his career, whereas Virat Kohli and Rohit Sharma have 3-4 years of non-prime cricket left in them, at the most. We are suddenly staring at a situation of not having a single “star” to feature in all ads — like a Tendulkar, MSD, or Kohli. Although KL Rahul and Hardik Pandya could be these poster boys, they are yet to dominate media space the way Kohli did. A Bumrah or an Ashofwin might not get the best of endorsements, and unless a Rishabh Pant or an Ishan Kishan comes up quickly enough, it could get tricky.
Viacom has played its part in the astronomical rise of IPL broadcasting rights, but the road ahead looks bumpy. It was the same for Star when it bid for Indian domestic season, but it beat the negative expectations and ended the five-year tenure with a strong topline.
Sarkar is Associate Professor of Marketing, Indian Institute of Management, Ranchi, and Tharad isAssociate Vice President, Anand Rathi