A 'doosra' in IPL ad game: Viacom 18 has set aggressive targets to chase

Based on calculation, while the cost of viewing the entire IPL season is only Rs 38 on TV, the cost of streaming 10 matches would cost anything between Rs 360 to Rs 2,640

March 31, when the Indian Premier League (IPL) begins, will see another sort of rivalry being played out, but this one will be off the field, unseen by the millions of fans that will watch the 16th season of this premier T20 tournament. This is the no-holds-barred competition for the Rs 5,000 crore IPL advertising pie.

Disney Star has been the undisputed champion here for the past five years with both digital and TV rights under its belt. This season, the nature of the advertising game has changed dramatically with TV and digital rights going to different entities. In June last year, Viacom 18 -- a joint venture between Reliance, US mass media conglomerate Viacom, James Murdoch, the younger son of media mogul Rupert Murdoch and Uday Shankar, former Disney India chairman -- won the IPL digital rights for the 2023-7 cycle for Rs 23,758 crore.

That means the advertising pie is split between Disney-Star, which retained the five-year TV rights for Rs 23,575 crore, and Viacom 18. Given the huge payout by Viacom 18, which amounts to Rs 50 crore per match, it is no surprise that the joint venture aims to rewrite the rules of the ad revenue game.

First, it has set a target of getting 50 per cent of the total advertising spends in the tournament. To understand the ambitious nature of this aim, consider that 80 per cent of Disney Star’s broadcasting revenues came from TV, with its over-the-top (OTT) platform Disney+ Hotstar accounting for the rest.

Second, Viacom 18 wants to expand the advertising base nearly four-fold to over 500 companies and is holding talks with some major advertisers as well as small and medium companies (SMEs) and regional players.

Third, it is disrupting Disney+ Hotstar’s established IPL model of relying on subscriptions-plus-advertisements. In the 15th season, Disney Star had over 50 million paid subscribers on Disney Hotstar during IPL. In contrast Viacom 18 is offering all the matches free on its OTT platform Jio Cinema (which already has 100 million active users), irrespective of the telecom service or smart phone being used. It will also tap the 75 million connected TV homes streaming OTTs. Taken together with 750 million smartphone users, Viacom 18 is confident of hitting a record digital viewership of 550 million in IPL -- the highest was 330 million in 2018.

Critics suggest that the “free” element is misleading. That’s because even if the subscription is free, viewers will still have to pay the telecom service provider, making digital viewing significantly more expensive than TV viewership. Based on their calculation, while the cost of viewing the entire IPL season is only Rs 38 on TV, the cost of streaming 10 matches based on the telecom regulator’s cost of Rs 10 per GB would range from Rs 360 to Rs 2,640 for those who want to watch on a 4k (or ultra-high definition) service. That is because it requires a minimum of 3.6GB for streaming a single match on Standard Definition (SD) and much more for 4k.

Viacom 18 sources counter that such arguments do not reflect realities of viewership habits. They contend that the average daily data usage in the various packages used by Jio’s 419 million customers is already over 2GB a day, which can be taken as a proxy for data usage by the telecom subscriber universe. That’s enough to watch one match, more so because few viewers watch a match in its entirety and not all watch every day either. In other words, the average telecom subscriber may not need to buy extra data to watch IPL matches. Even if they do, all telecom service providers are expected to offer low-priced top-up plans during the IPL season, making the additional spends negligible.

Besides, experts point out, unlike Disney Star, the digital rights for IPL could be used to enhance telecom companies’ data play. The tournament could be used to incentivise customers to move from 4G to 5G, which offers better speeds (at the same tariff as 4G currently), and would improve average revenue per user metrics for telecom companies. Jio alone, for instance, has targeted 100 million 5G customers by FY24.

As for Viacom 18’s advertising targets, critics suggest that big advertisers focus on only about 100 million of the paid digital subscribers. A free service may bring in more users whom advertisers may not be interested in targeting at all. So, the freebie move may not translate into more advertising.

The advertising agencies have a different take on Viacom 18’s strategy. Sandeep Goyal, managing director Rediffusion, said, digital has a two-fold advantage -- almost infinite inventory compared to 2,800-3,000 seconds on a TV broadcast during IPL. Plus, on digital, customised targeting is possible. “If Viacom 18 has the sharpness to profile customers on the fly, then a self-serve model can be launched for, say, SMEs and will most likely succeed. That’s why the number of advertisers can be much more that 500-700,” he explained.

Advertisers see a clear shift. A senior executive of a leading FMCG company pointed out: “Increasingly in urban markets there has been a shift in viewership to digital as more and more people are using the mobile. It is also cheaper in terms of the customer profile one is wanting to reach out too. But that does not mean we will not put our money on TV.”

That apart, the traction from TV is undoubtedly slowing, both in terms of viewership and spends. In 2022 overall digital advertising hit Rs 34,500 crore overtaking TV for the first time, which ended at Rs 30,000 crore. And the move appears to be irreversible with digital advertising expected to grow 25 per cent (albeit on a smaller base) compared with 6-7 per cent this year.

Still, there are 108 million households glued to the idiot box, though the number shrank from a pre-Covid 133 million in 2019. But it is also possible that this might be temporary, for many of the free-to-air TV households could upgrade to pay TV while some would go mobile.

TV viewership for IPL has fallen from 405 million in 2021 to around 360 million in 2022 and so has minutes of usage. Disney Star sources said this was because of IPL fatigue as the 15th edition of the tournament took place just six months after the 14th. But they are expecting viewership to hit 500 million on TV in the forthcoming IPL, more or less in line with what Viacom 18 is also aiming for. So the IPL ad battle-lines are clearly drawn. And as at least one TV broadcaster admits, the fallout from this battle is that advertisers will get a better bargain and consumers won’t be complaining.

Off The Ball

Viacom 18 is aiming at a viewership of 550 million in IPL on digital, Disney Star India is aiming at 500 million

Viacom 18 is looking at roping in over 500 advertisers — big and small — four times more than what is normally done in IPL

IPL reach on linear TV has fallen from 405 million in 2021 to 360 million in 2022 based on industry estimates, but that could be because of fatigue of tournaments taking place within six months of each other

Number of TV households has fallen to 108 million form 133 million, but this drop could be temporary as more free to air users go pay

Experts  say ad inventory for digital is limitless  compared to 3,000 seconds on TV for each match