Like any good cricketing contest, it went all the way down to the wire. We are talking about the auction for broadcast rights of the world's most popular cricket league, the Indian Premier League (IPL). Reliance Industries-backed Viacom18 pipped to the post Disney+ Hotstar as the lucrative digital rights was snagged by the former.
Viacom18 walked away with the rights for Rs 20,500 crore while Walt Disney Co-owned Disney Star snapped the Indian sub-continent TV rights for Rs 23,575 crore. Viacom18 also won the Package C for the digital rights for 18 non-exclusive marquee games per season. Viacom18's winning bid was for Rs 3,273 crore.
Package D, broadcast rights for the rest of the world, was grabbed by Times Internet in partnership with Viacom18, at a total price of Rs 1,058 crore. While Viacom18 bagged the broadcasting and streaming rights for Australia, New Zealand, South Africa and the United Kingdom, Times Internet got rights for the US and the Middle East and North Africa (MENA) region.
The Indian cricket administrative body BCCI, which runs the IPL, started the e-auction on June 12, 2022, and the process went for three arduous days during which the auction was no-holds-barred between the various players.
India’s biggest sporting event is now valued at Rs 48,400 crore – a three-time increase in comparison to the previous cycle. As the honorary secretary of the BCCI Jay Shah said, "IPL is now the 2nd most valued sporting league in the world in terms of per match value." The National Football League (NFL) is ahead by a small margin at $17 million.
Viacom18 seemed more keen on snagging IPL rights
While the entire e-auction caught the media's frenzied attention, there was extra focus on the digital streaming rights, as it is believed to be the future of sports watching at homes. "India has seen a digital revolution & the sector has endless potential. The digital landscape has changed the way cricket is watched. It has been a big factor in the growth of the game & the Digital India vision," Jay Shah said.
And it is here where Disney+ Hotstar lost out to the aggressive bidding of Mukesh Ambani-backed entity. It will certainly hurt the Walt Disney company as IPL streaming was getting it a significant amount of the subscribers and revenues.
Rebecca Campbell, Chairman, International Content and Operations, The Walt Disney Company, said "we made disciplined bids with a focus on long-term value. We chose not to proceed with the digital rights given the price required to secure that package."
Tough times ahead for Disney+ Hotstar
I wonder if Star are happy at the fact that they have got the TV rights for another 5 years or are bitterly disappointed to have lost out on Hotstar which was so dependent on cricket subscriptions. I think it is a bitter-sweet moment.June 14, 2022
As long as the IPL streaming rights were in its kitty, the Disney+ Hotstar platform wasn't really stretched to work on its subscribers platform. The streaming platform’s total subscriber base is around 50.1 million, well over a third of its global subscribers of 137.7 million. Half of Disney’s most recent quarterly subscriber growth came from India, thanks to the IPL.
Well-known cricket commentator Harsha Bhoigle said: "I wonder if Star are happy at the fact that they have got the TV rights for another 5 years or are bitterly disappointed to have lost out on Hotstar which was so dependent on cricket subscriptions. I think it is a bitter-sweet moment."
It is being said that with IPL streaming rights loss, Disney+ Hotstar will see a huge erosion in its Indian subscribers (in millions). Also, it is said that 70% of its OTT advertising revenue is IPL-led. So it is a double blow for the platform.
But now it needs a plan B as Viacom18 has spoilt its party. The question is does the Hotstar platform have a backup strategy. It still has some India-centric cricket rights and other sports events.
"We will be exploring other multiplatform cricket rights, including future rights for International Cricket Council (ICC) and Board of Control for Cricket in India (BCCI), which we currently hold through the 2023 and 2024 seasons, respectively. Additionally, we hold Pro Kabaddi League rights, Indian Super League football rights, as well as various international sports rights, including the Wimbledon Championships and the English Premier League,” Rebecca Campbell said.
But having practically put all its eggs in the IPL basket, Disney+ Platform now needs new avenues to keep up the revenues and subscription base. That, as they say, seems a tough ask now.
