How Ambani's JioCinema Is Earning Crores When IPL Streaming Is Free

As the Indian Premier League (IPL) 2024 has started, all eyes are on JioCinema, the digital platform owned by Viacom18, as it rolls out its ambitious plan to stream the cricketing extravaganza for free. This move has sparked widespread debate within the media and advertising spheres, with experts questioning the feasibility of JioCinema's strategy.

JioCinema set a new record this season by hitting 590 million video views on the opening day of the Indian Premier League (IPL) 2024. A whopping 111 million fans tuned in to catch the exciting match between Chennai Super Kings (CSK) and Royal Challengers Bengaluru (RCB) at the MA Chidambaram Stadium in Chennai last Friday.

According to JioCinema, the official streaming partner of IPL, the viewership on the first day of this season jumped by 51% compared to last year's IPL opener. Fans spent a total of 6.6 billion minutes watching the match, which ended with a victory for CSK.

IPL

Let's delve deeper into the dynamics at play and explore how JioCinema aims to capitalise on this opportunity.

JioCinema's Bold Move: Streaming IPL for Free

Viacom18, the digital media rights holder of IPL, made headlines by announcing that IPL matches would be available for free streaming on JioCinema, accessible to users across all telecom networks. This decision was a significant departure from the conventional model adopted by previous digital partners like Disney+Hotstar, which restricted IPL access to paid subscribers only.

Challenges and Opportunities: Monetizing Free IPL Streams

One of the key challenges facing JioCinema is the monetization of its free IPL streams. With no subscription revenue to rely on, the platform is banking heavily on advertising to generate income. However, amidst inflation and global economic uncertainties, advertisers have become more cautious with their spending. This raises questions about the sustainability of JioCinema's revenue model.

Viacom18's Strategic Play: A Bid to Disrupt the Market

Viacom18's decision to offer IPL for free on JioCinema is not merely about capturing viewership but also about disrupting the market dominated by rivals like Disney+Hotstar. By eliminating barriers to IPL consumption, Viacom18 aims to attract a wider audience base and challenge the existing norms in the industry.

Financial Implications: Balancing Costs and Returns

Earlier this year, Viacom18 got the rights to show IPL games online by paying Rs 23,758 crore for five years, which is almost the same as what Disney Star paid for TV rights. This means they spend about Rs 4,750 crore every year for this. After spending around Rs 48,000 crore on IPL, both Disney Star and Viacom18 want a piece of the Rs 4,000 crore advertising earnings from IPL. IPL is very attractive to advertisers.

Navigating the Advertising Landscape: A Test of Viacom18's Strategy

Despite the lower ad rates offered by JioCinema compared to its competitors, the platform is banking on its vast user base and the backing of Reliance Group's deep pockets to weather the storm. However, the success of this strategy remains to be seen, with industry experts closely monitoring the developments.

The Road Ahead: Opportunities and Challenges

Tata IPL 2024 trophy

As the IPL season unfolds, Viacom18 will face the dual challenge of attracting advertisers and ensuring viewer engagement. While the free streaming model is expanding the reach of IPL, the ultimate test lies in its ability to translate viewership into revenue. Only time will tell whether JioCinema's gamble will pay off or if it's a case of too little, too late.

Brand Spotlight

JioCinema launched a new segment called Brand Spotlight. It featured companies like Dream11, Charged by Thums Up, Parle Products, Britannia, Dalmia Cements, and HDFC Bank. This IPL campaign had 18 sponsors and more than 250 advertisers participating for the first time.

Date coast for watching the match

Watching an IPL match on your phone or TV for three hours needs a lot of data, like 3-10 GB, depending on your device and the video quality. In India, one GB of data costs about Rs 14 on average. So, to watch just one IPL match, you might spend between Rs 28 to Rs 140. For the whole 74-match tournament, it could be Rs 2,000 to Rs 10,000.

Viacom officials said that most people won't watch the full match, so they might not use as much data. They argued that an average viewer would only need about 2 GB of data for the IPL.

Viacom didn¡¯t respond to questions about how much they charge for ads, data costs, or how they plan to make back the money they spent.

Before the IPL started, Reliance Jio introduced a new family plan called Jio Plus. These plans let a family of four try out their 5G services for free for a month. The plans start from Rs 399 and go up to Rs 696 for a family of four. If the user isn't happy, they can cancel the plan.

As mentioned in exchange4media, Jio said they're focused on giving great benefits to post-paid users. They're expanding their 5G network and want to welcome millions of new post-paid customers.

How much Ambani¡¯s earned from IPL 2023

In the IPL 2023 season, there was a big increase in advertising money, reaching Rs 10,120 crore. A report said that the Board of Control for Cricket in India (BCCI), team owners, and TV companies got 65% of this money directly. The rest, 40%, came indirectly.

According to a report by Redseer Strategy Consultants, JioCinema and Star Sports made Rs 4700 crore from ads, while Rs 1450 crore went to the teams, and BCCI got Rs 430 crore. Overall, 65% of the advertising money went directly to BCCI, teams, and TV companies.

In the ever-evolving landscape of digital media, JioCinema's bold move to offer IPL for free signifies a paradigm shift in content consumption patterns. Whether this strategy proves to be a game-changer or a missed opportunity remains to be seen. Nonetheless, it underscores the relentless pursuit of innovation and disruption in the quest for audience engagement and market dominance.