Mukesh Ambani's consumer empire gets a cricket spin with IPL digital rights

After solidifying his control of a $2 telecom carriage business, the world’s seventh-richest man is seeking his next fortune in a $1 content-streaming enterprise. 
 

Actually, the spoils from the digital rights for Indian Premier League cricket, snagged by billionaire Mukesh Ambani’s Viacom18 by dethroning Walt Disney & Co. for the next five years, aren’t even at the $1 mark yet. Disney+ Hotstar, primarily a service for cricket-loving Indians that’s also available in some other Asian markets, has 50 million subscribers and rapid growth. But the monthly average revenue per user for the partly ad-supported app is just 76 cents, a drag on what Disney+ makes from customers elsewhere who pay the full cost of entertainment.

The streaming rights for IPL, the Super Bowl of cricket, have gone for 205 billion rupees ($2.6 billion), according to media reports. Viacom18 Media Pvt., a joint venture between Ambani’s Reliance Industries Ltd. and Paramount Global, is paying that amount for 410 matches over five years starting 2023, or $6.4 million per game. There’s a separate $3 billion TV deal for the Indian subcontinent, though it isn’t clear who has grabbed it; the Financial Times says Disney might have been retained it; other reports suggest Sony Group Corp. is the winner. An official announcement will come after the smaller auctions — for non-exclusive digital content and overseas TV rights — that are likely to conclude Tuesday. 

The headline-grabbing figure is the value bidders put on the streaming package, which is now worth almost as much as IPL on television. A big chunk of the credit for that catch-up goes to Ambani. His 4G Jio network disrupted the Indian telecom market with cheap data, acquiring more than 410 million customers since its launch in 2016. As Jio subscribers burn through their plans to watch cricket on their mobile devices, Ambani’s carriage business will get an automatic lift from his investment in content. After a tariff increase, the telecom users are finally paying him a little more than $2 a month; if he can get another $1 — by luring them with cricket and keeping them for other entertainment — his $38 billion-a-year consumer empire could bulk up some more.  

Even so, it won’t be easy to make money on this new investment at a time when surging inflation is crimping discretionary spending. That’s where the former 21st Century Fox executive Uday Shankar comes in. The man behind the popular Indian app that was later acquired by Disney is now a key driver of Ambani’s media ambitions. Viacom18 recently received a $1.8 billion capital infusion from Bodhi Tree Systems, an investment firm created by Shankar and his former boss, James Murdoch. Ambani will expect Shankar, who’s known for his keen pulse of media consumption in small-town India, to be as successful in beating Disney+ Hotstar as he was in creating Hotstar for Murdoch and his dad, Rupert.

Among other things, Shankar has to sustain viewer — and advertiser — interest in IPL. He was instrumental in bringing the competition out of a deep funk after a match-fixing scandal in 2012. The current situation isn’t as dire as it was then, but it isn’t great, either. TV viewership is lackluster; Indian media have cited unnamed sources to report that some advertisers have asked Disney to compensate them for a drop in viewership in this year’s edition. While a part of the audience may have cut the TV cords and moved online, the championship itself is at risk of turning tedious. 

Still, it was surprising that Amazon.com Inc., which was widely expected to give stiff competition to Viacom18, decided to stay out of IPL bidding at the last minute. The much-anticipated Round 2 in the contest between Ambani and Amazon’s Jeff Bezos — Ambani recently outmaneuvered his rival in taking over control of a near-bankrupt Indian retailer — never materialized. Perhaps the Seattle-based behemoth is happy to livestream English Premier League soccer; maybe it sees a surer (and less expensive) pathway for Prime to grow in India on the back of e-commerce, rather than e-cricket. 

Amazon’s apathy should also give Ambani pause. He’s India largest retailer. But can he milk his splashy investment for some additional commerce for JioMart, the online alliance of affiliated neighborhood stores buttressing his own network of 15,000-plus Reliance Retail stores? Could Meta Platforms Inc.’s popular WhatsApp messenger service help him collect payments for snacks ordered online while Mumbai Indians (owned by the Ambani family) is taking on Chennai Super Kings? Commerce apart, Ambani has to invest in content because arch rival Gautam Adani is snapping at his heels. The coal czar is starting off with news programming by buying a stake in Quintillion Business Media Pvt., which was an Indian partner of Bloomberg LP. The world’s ninth-richest tycoon has also set up his own media subsidiary, which wants to be in everything from publishing to advertising. Adani is yet to show an interest in cricket telecast or family soap operas. But he just acquired the rights to own and operate a team in the United Arab Emirates’ flagship T20 cricket league. So you never know.

However, staying ahead of Amazon and Adani are secondary considerations. The bottom line is this: Ambani has decided to spend billions on content, and now he has to earn it all back in five years. Not just from advertisers, but via carriage and commerce. One dollar at a time.