The quest to secure streaming rights for live sports events amidst the OTT contenders has almost become a strategic battle. In this article, I’d like to understand why exactly I call it a ‘battle’ and how the multifaceted realm of sports consumption in India can be coupled with the exponential growth of sports streaming in OTT. It also looks into how platforms like Hotstar and JioCinema are revolutionizing this opportunity.
Over-the-Top (OTT) platforms have revolutionized how sports are consumed, especially the ways in which sportfing audiences engage with live events. But to understand the role of OTT, it is pertinent to understand the scope of sports in India in terms of its consumption.
With sports penetrating OTT platforms, viewers have a plethora of options of how they want to engage with content. Analyzing the streaming patterns under the study titled ‘The Global Sports Media Landscape’, it is revealed that nearly 45% of urban Indians have opted for sports platform subscription to access exclusive sports content. Subscriptions centered around sports also elevate the extent of sports consumption. A whopping 77% of urban Indians state that their content subscription has motivated them to increase their sports content consumption.
Cricket emerges as the most favored sport in the digital sports streaming realm with a significant 72% of Indian sport subscribers engaging with cricket content. Followed closely are soccer with 40% and tennis with 32%.
But it is important to realize the cost of serving so much content that the OTT platform undertakes. Acquiring rights for events such as the Indian Premier League for cricket is a very costly affair for these platforms that demand high financial commitment. Despite this price tag, streaming giants in India are eager to pursue these rights in anticipation of substantial surge in viewership which eventually translates to revenues and subscriptions. The landscape of bidding is terse as seen in the case of Viacom18, supported by Reliance, outbid Disney for the 2023-2027 IPL tournaments. This can be seen as a strategic way for them to boost their revenues. Things became interesting when the Reliance backed streaming giant, JioCinema, entered the playing ground. What makes it most interesting is that JioCinema is pledging to offer free streaming of the IPL.
Following closely, Disney+ Hotstar has revealed its plans to provide free streaming of the Asia CUP and the ICC Men’s cricket word cup for mobile users. While this may seem like a win, experts in the industry suggest that offering complimentary access to premium cricket content maybe adversely impact their overall revenue streams. With both Jio and Hotstar entering the free streaming arena, other OTT platforms are constrained from implementing price hikes in order to stay competitive. But this begs the larger question, how is OTT revolutionizing live sports streaming?
Lets look at two instances – Hotstar leveraging IPL and JioCinema with IPL Live Streaming. These two platforms and their successes highlight the potential of the relationship between sports and OTT streaming services.
Among competitors like Amazon Prime Video, Netflix, SonlyLIV and Zee5 in India, Disney+ Hotstar leads the video streaming market in terms of subscribers, although Netflix holds the top spot for subscription revenue.
The platform garnered 1500 crores in 2022 through sponsoporship and advertising attributed to the Indian premier League according to industry estimates. Sajith Sivandan, the head of Disney+ Hotstar stated that the IPL played a pivotal role in the platform’s success. Now, Viacon18, through JioCinema has won the streaming rights for the years 2023-2027 and is offering free streaming of IPL. And their viewing plan seems to be a great success!
Leading streaming platforms are increasingly turning their attention to sports content in an effort to replicate the success seen by Hotstar during the IPL seasons from 2017 to 2022. In the competition to expand their subscriber bases, platforms such as Disney+Hotstar, JioCinema, SonyLiv, and Amazon Prime Video are actively acquiring both major and specific sports properties.
Sony Pictures Networks India (Culver Max Entertainment Private Ltd) has recently one upped its own plan for sports by securing a three-year deal for the US Open and extending its partnership with the England and Wales Cricket Board (ECB).
Disney Star gained traction by securing TV and digital rights for ICC events from 2024 to 2027, although it lost the IPL digital rights to Viacom18, subsequently sublicensing them to Zee Entertainment.
JioCinema marked itself apart by live streaming the FIFA World Cup 2022 and disrupted the OTT market by offering free viewership for IPL 2023.
With an expected increase in smartphone usage in India, streaming services anticipate a surge in digital subscribers, making sports content a crucial battleground for market dominance. The recent moves by various platforms underscore the growing significance of sports in the digital streaming arena.
But what we must ask ourselves at the same time is, what will this do to the traditional TV viewing audience?
In June of this year, when Viacom18 secured the digital media rights for the Indian Premier League (IPL) for Rs 23,758 crore, slightly exceeding the TV rights acquired by Disney-Star India for Rs 23,575 crore, it highlighted the industry’s keen interest in the online platform. Digital sports viewership has been consistently rising, surpassing TV in terms of annual growth.
Despite TV maintaining a larger overall audience, with 900 million viewers compared to 450-500 million monthly active users online, industry experts anticipate that digital sports revenue may not match TV revenue in the immediate future.
According to the GroupM-ESP Sporting Nation’s Making 2022 report, digital ad spend in 2021 reached Rs 965 crore, more than doubling the value from 2020 and accounting for 16% of total media expenditures by brands. Although both TV and digital ad spends on sports exceeded their 2019 levels, digital ad spends experienced a growth of over 100%.
TV remains the preferred genre, with over 730 million viewers in 2022, marking a 21% increase from 2021, within a total TV universe of 900 million, suggesting room for further expansion. IPL generates revenues of approximately Rs 3,000-4,000 crore, covering advertising and subscriptions, while Hotstar’s earnings stand at Rs 1,500-1,600 crore.
Even if digital sports grows by nearly 30% over the next three years, it would still lag behind TV, which is expanding at a rate of 10-12%. Despite a 50-50 split in content costs between TV and digital, there remains a significant disparity in monetization. While digital viewership rivals TV and could potentially surpass it, achieving equivalent ad revenue is challenging in this fiercely competitive segment.
So is sports and OTT a match made in heaven? In some senses yes, it gives access to live streaming to a large population without the demands of owning the infrastructure such as a TV or dish connection. But what distinguished Live Sports Streaming from other content is its live action engagement, the fan communities and the social interactions within the fan communities through real-time discussions etc. additionally, streaming options place the viewer in the midst of the action that just making them a passive viewer. They can change camera angles, have Multiview options that allow viewers to watch more than one live game at a time, etc.
By allowing people to watch what they want, from where they want to how they want it, the OTT/Sport alliance seems to be a perfect one, a match made in heaven.