In the vast landscape of OTT platforms, the quest to secure streaming rights for live sports has become a strategic battleground. This article delves into the multifaceted realm of sports consumption in India, exploring the exponential growth of sports streaming, the current state of OTT sports streaming, and how platforms like Hotstar and JioCinema are revolutionizing the game.
Sports consumption in India has undergone a significant transformation with the advent of Over-The-Top (OTT) platforms, revolutionizing the way audiences engage with live events. This blog explores the unprecedented growth of sports streaming in India, delving into the current state of OTT sports streaming and the impact of platforms like Hotstar and JioCinema. From the allure of Indian Premier League (IPL) to the emerging streaming wars among Hotstar, SonyLiv, and JioCinema, we unravel the dynamics that position live sports streaming as a rising star and potential market disruptor for traditional TV.
Sports Consumption in India
The surge in digital adoption, coupled with increasing internet penetration, has fueled the exponential growth of sports streaming in India. As more viewers shift towards online platforms, OTT services have become the go-to destination for consuming live sports content.
|The Explosive Charm of Cricket
|Kabaddi: Modern Twist to Traditional Sport
|Football: Kicking Up Storm
|Hockey: Regaining the Lost Glory
| Indian Premier League (IPL) dazzles the digital landscape, amassing an extraordinary cumulative viewership of over 600 million.
Star Sports garnered a colossal 266 million viewers, excluding the final, making the Asia Cup 2023 the most-watched edition of the competition.
|In 2023, the Pro Kabaddi League achieved a remarkable viewership milestone of 450 million, reigniting the nation’s passion for this indigenous sport.
The league’s captivating blend of fast-paced action, intricate strategies, and the harmonious fusion of tradition and modernity has played a pivotal role in elevating its viewership to unprecedented heights.
|The Indian Super League (ISL) commands an audience of approximately 400 million, reflecting the nation’s burgeoning interest in football.
JioCinema app recorded an astounding viewership of 110 million during the FIFA World Cup 2022, underscoring India’s fervent affection for this dynamic sport.
|Once celebrated as India’s national sport, hockey experienced a decline in popularity over the years.
The historical sport is making a triumphant comeback, evident in its viewership statistics. The Hockey India League (HIL) now draws an impressive annual viewership of approximately 40 million.
Growth of Sports Streaming in India
A comprehensive analysis of the current state of OTT sports streaming reveals a landscape brimming with possibilities. With platforms like Hotstar, SonyLiv, and JioCinema leading the charge, viewers have unprecedented access to a plethora of sports content.
According to a study titled “The Global Sports Media Landscape”, which conducted the survey analysing the sports consumption pattern globally came across these findings. Analyzing the streaming patterns reveal that nearly 45% of urban Indians have opted for sports platform subscriptions to access exclusive sports content, surpassing the 39% who haven’t subscribed.
Subscriptions centered around sports elevate the extent of sports consumption, with a substantial 77% of urban Indians stating that their sports content subscription has motivated them to increase their sports content consumption, while 18% maintain their existing viewership levels.
In the realm of digital sports streaming and content, cricket emerges as the most favored sport, with a significant 72% of Indian sports subscribers engaging with cricket content. Following closely are soccer, embraced by 40%, and tennis, enjoyed by 32% of urban Indian sports subscribers.
The Current State of OTT Sports Streaming
In India, acquiring media rights for cricket events such as the Indian Premier League (IPL) and International Cricket Council (ICC) tournaments is a costly affair for platforms, demanding a significant financial commitment. Despite the hefty price tag, Indian streaming giants eagerly pursue these rights, anticipating a substantial surge in viewership and, consequently, revenues.
Yet, the underlying narrative reveals a contrasting tale, where companies invest billions of dollars not merely for financial gains but to retain the attention of the cricket-devoted Indian audience, even if it means willingly enduring a hit to their revenue.
Hotstar has consistently leveraged its rights to various cricket tournaments, notably the IPL, strategically using them to boost its subscriptions. Cricket has been a key driver, enticing consumers to invest in the content.
However, the landscape shifted when Viacom18, supported by Reliance, secured digital streaming rights for the IPL for the 2023-2027 period, outbidding Disney.
The plot thickened with the entry of Reliance-backed streaming giant, JioCinema, which played a disruptive card precisely when its competitors were grappling to retain paid users. Similar to how Jio transformed the Indian telecom sector with affordable data and voice tariffs, JioCinema has shaken up the OTT market by offering free streaming of the IPL, setting off a ripple effect.
The Clash of Viewership and Revenue: More Noise Than Impact?
Following closely behind its latest competitor JioCinema, Disney+ Hotstar revealed its plan to provide free streaming of the Asia Cup and ICC Men’s Cricket World Cup for mobile users. The platform reached a peak of 5.9 Cr crore concurrent viewers during the finals between India-Australia match of the ICC WC, setting a new digital viewership record for any India match. Concurrently, JioCinema witnessed 3.2 crore viewers tuning in for the IPL 2023 final between the Chennai Super Kings and the Gujarat Titans.
While both major streaming platforms achieved record-breaking viewership, experts in the industry suggest that offering complimentary access to premium cricket content may have adversely impacted their overall revenue streams. The substantial cost of acquiring media rights poses a challenge, and compensating for the loss of subscription income with advertising revenue remains challenging. Moreover, the growth rate of advertising revenue is not keeping pace with the escalating costs associated with securing media rights.
Interestingly, with IPL rights in its kitty, the company saw almost 2X year-on-year (YoY) growth in its FY22 advertisement revenue, which stood at INR 1,684.31 Cr. In addition, its subscription revenue rose 65.67% to INR 1,373.61 Cr in FY22 from INR 830.96 Cr in FY21.
With both JioCinema and Disney+ Hotstar entering the free streaming arena, other OTT platforms are constrained from implementing price hikes to stay competitive. A media partner from a prominent consultancy firm suggests that providing premium content for free may not be sustainable in the long run, possibly lasting only a year or two, given the high costs associated with sports event rights.
Currently, Jio’s aggressive market share acquisition strategy appears dominant, while Disney+ Hotstar is perceived as striving to maintain its foothold in a volatile market.
How OTT is Revolutionizing Live Sports Streaming?
The pivotal role of OTT platforms in revolutionizing live sports streaming is exemplified through the success stories of Hotstar and JioCinema. A deep dive into Hotstar’s leveraging of IPL and JioCinema’s peak with IPL live streaming unveils the strategies that propelled these platforms to the forefront. From exclusive content rights to interactive features, OTT platforms are reshaping the sports-viewing experience.
How Hotstar Leveraged on IPL?
Disney+ Hotstar currently leads the video streaming market in India, surpassing competitors like Amazon Prime Video, Netflix, SonyLIV, ZEE5, and others in terms of subscribers (although Netflix holds the top spot in subscription revenue).
In 2022, the platform garnered sponsorships and advertising valued at ₹1,500 crore, with approximately 70% of the ad revenue attributed to the Indian Premier League (IPL), according to industry estimates. Sajith Sivanandan, head of Disney+ Hotstar, India, acknowledged the pivotal role of the IPL in the platform’s success, propelling it to become the country’s foremost streaming service.
In 2018, Star India secured the digital and television rights for the Indian Premier League (IPL) for Rs 16,347.50 crore, leveraging the prevalence of affordable data and widespread smartphone adoption to establish Hotstar. However, on June 14, after three days of intense bidding, while Disney Star won the television rights, it lost the digital rights to Viacom 18.
Nevertheless, it’s a bitter pill to swallow. In recent years, the platform had become the cornerstone of IPL viewership. In 2022, during a match between Chennai Super Kings and Mumbai Indians, peak viewership reached 8.3 million, and for a clash between Chennai Super Kings and Royal Challengers Bangalore, it was 8.2 million. A year earlier, Hotstar recorded a peak viewership of 10 million.
As of April 2022, Disney+ Hotstar commands nearly 50 percent of India’s total subscriber-based online video market share, with Amazon Prime Video at 9 percent, Netflix at 8 percent, and the remaining share distributed among other players, according to Omdia. IPL is among the top three cricketing rights that has significantly contributed to Disney+ Hotstar’s growth. It has enabled the platform to attract advertising revenue and paid subscriptions.
JioCinema Reaches its Peak with IPL Live Streaming
Offering free streaming of the Indian Premier League (IPL) on JioCinema proved to be a successful strategy for the platform this year. The IPL final on JioCinema saw a peak concurrency of 32 Mn viewers, with a total of 17,000 Mn video views and 120 Mn unique viewers throughout the 16th edition of IPL. Notably, JioCinema sacrificed subscription revenue to provide free IPL streaming.
However, JioCinema won on the advertising side, twenty-six brands partnered with JioCinema for IPL 2023, including Dream11, JioMart, PhonePe, Tiago EV, Jio, Appy Fizz, ET Money, Castrol, TVS, Oreo, Bingo, Sting, AJIO, Haier, RuPay, Louis Philippe Jeans, Amazon, Rapido, Ultra Tech Cement, Puma, Kamla Pasand, Kingfisher Power Soda, Jindal Panther TMT Rebar, Saudi Tourism, Spotify and AMFI.
OTT & Sports : Is it a match made in heaven?
Exploring the symbiotic relationship between OTT and sports, this section investigates the nuances of Ad-Supported Video on Demand (AVOD) and Subscription Video on Demand (SVOD) models. It dissects the factors that distinguish live sports streaming from other content genres, emphasizing the unique appeal that sports holds for audiences, making it an ideal match for OTT platforms.
AVOD & SVOD: How it Impacts Live Sports Streaming?
AVOD (Advertising Video On Demand) and SVOD (Subscription Video On Demand) are two different models of content distribution in the realm of Over-The-Top (OTT) platforms, and they play distinct roles in the context of sports live streaming.
AVOD (Advertising Video On Demand)
Definition: AVOD relies on advertising revenue to sustain its operations. Users can access content for free, but the viewing experience is interrupted by advertisements at regular intervals.
Benefits for Sports Live Streaming:
- Free Access: AVOD allows users to watch sports content without the need for a subscription, making it accessible to a broader audience.
- Revenue from Advertisements: Advertisements provide a revenue stream for the platform, allowing them to offer content for free.
- Wider Reach: Since there are no barriers to entry, AVOD platforms can attract a larger user base, especially those who might be hesitant to pay for a subscription.
SVOD (Subscription Video On Demand)
Definition: SVOD operates on a subscription-based model where users pay a recurring fee to access content. There are no advertisements during streaming for subscribed users.
Benefits for Sports Live Streaming:
- Stable Revenue: SVOD platforms generate revenue through subscription fees, providing a stable income source.
- Premium Content: SVOD often offers exclusive or premium content, including live sports events, attracting users who are willing to pay for a superior experience.
How Both Models Benefit Sports Live Streaming:
- Hybrid Models: Some OTT platforms adopt a hybrid approach, offering both AVOD and SVOD options. Users can choose between a free, ad-supported model or a premium, ad-free subscription.
- Maximizing Revenue: By incorporating advertising in the AVOD model and subscriptions in the SVOD model, platforms can diversify their revenue streams, ensuring financial stability.
- Audience Segmentation: AVOD attracts a broader audience, including those who may not subscribe, while SVOD caters to users willing to pay for an enhanced experience. This segmentation allows platforms to serve a diverse user base.
In the context of sports live streaming, AVOD and SVOD models provide flexibility for users with different preferences and financial capacities. AVOD ensures widespread access to sports content, while SVOD caters to enthusiasts who seek an immersive and ad-free experience, contributing to the overall success of OTT platforms in the sports streaming industry.
What distinguishes Live Sports Streaming from other Content?
Live sports streaming on Over-The-Top (OTT) platforms is distinct from other content in several ways, and these distinctions contribute to its unique appeal and challenges. Here are key differentiators:
1. Live Action: Sports events are inherently live, offering real-time excitement and unpredictability. Viewers engage with the content as it unfolds, creating a sense of immediacy and urgency.
2. Community and Social Aspect:
- Fan Communities: Live sports often have passionate fan communities. Viewers connect with others who share the same enthusiasm, fostering a sense of belonging and community.
- Social Interaction: Viewers engage in real-time discussions, reactions, and sharing on social media platforms during live events, enhancing the communal experience.
3. Appointment Viewing:
- Scheduled Events: Sports events follow a fixed schedule, creating a sense of appointment viewing. Fans plan their time around the match or game, contributing to a shared viewing experience.
4. Variety of Sports:
- Diverse Content: Sports streaming encompasses a wide range of sports, appealing to diverse interests. From mainstream sports like football and cricket to niche sports, there is content for various audiences.
5. Monetization Models:
- Subscription Models: Live sports are often a significant driver for subscription-based OTT platforms. Exclusive rights to major sports events become a selling point for premium subscriptions.
- Ad Revenue: Advertising during live sports broadcasts generates revenue for both free and subscription-based models, making it a lucrative market for advertisers.
6. Broadcast Rights and Exclusivity:
- Exclusive Agreements: OTT platforms often compete for exclusive broadcast rights, leading to partnerships with sports leagues. Exclusivity adds value to the platform and attracts subscribers.
7. Technical Challenges:
- Streaming Quality: Live sports demand high-quality streaming without lags or buffering. OTT platforms need robust infrastructure to handle the surge in viewership during live events.
- Hype Mode: JioCinema introduced a world class experience with a never seen before feature on OTT that is the Hype Mode. The Hype Mode, which allowed users to toggle between different camera perspectives and also threw up quick game insights, was a huge hit during FIFA 2023 as well. This is a one of a kind feature that will enhance the online streaming experience for the users.
- 360°: 360-degree viewing, often associated with virtual reality (VR) or augmented reality (AR), allows users to experience content from all angles, creating an immersive and interactive environment.
8. Global Audience:
- International Appeal: Major sports events draw a global audience. OTT platforms can cater to an international fan base, expanding their reach beyond regional or national boundaries.
9. In-Depth Analysis and Commentary:
- Comprehensive Coverage: Live sports streaming often includes pre-match analysis, halftime shows, and post-match discussions, providing comprehensive coverage for fans who seek deeper insights.
10. Seasonal Nature:
- Seasonal Peaks: Some sports have seasonal schedules, leading to peaks in viewership during specific periods. This cyclical nature requires strategic planning for content delivery and marketing.
Live Sports could be the next arena of streaming wars
Hotstar vs SonyLiv vs JioCinema
Major streaming platforms are increasingly focusing on sports content to replicate the success witnessed by Hotstar during the IPL seasons from 2017 to 2022. In the battle for expanding their subscriber base, platforms like Disney+Hotstar, JioCinema, SonyLiv, and Amazon Prime Video are aggressively securing both significant and niche sports properties.
Sony Pictures Networks India (Culver Max Entertainment Private Ltd) has recently strengthened its sports offerings, including a three-year deal for the US Open and an extended partnership with the England and Wales Cricket Board (ECB).
Disney Star made headlines by acquiring TV and digital rights for ICC events from 2024 to 2027, and while it lost the IPL digital rights to Viacom18, it sublicensed them to Zee Entertainment.
JioCinema definitely aced the game with the live streaming of FIFA World Cup 2022 and disrupted the OTT market by providing free viewership for IPL 2023.
As smartphone usage in India is expected to rise, streaming services anticipate a surge in digital subscribers, making sports content a crucial battleground for market dominance. The recent initiatives by various platforms underscore the growing importance of sports in the digital streaming landscape.
OTT Sports Streaming: The Rising Star or Market Disruptor for TV
When Viacom18 secured the digital media rights for the Indian Premier League (IPL) in June this year for Rs 23,758 crore, slightly surpassing the TV rights obtained by Disney-Star India for Rs 23,575 crore, it underscored the industry’s enthusiasm for the online medium. Digital sports viewership has been consistently growing, outpacing TV in terms of annual increases.
Although TV retains a larger audience overall, with 900 million viewers compared to 450-500 million monthly active users online, industry observers predict that digital sports revenue may not match TV revenue in the near 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 in 2020 and constituting 16% of total media expenses by brands. Although both TV and digital ad spends on sports surpassed their 2019 levels, digital ad spends witnessed a growth of over 100%.
TV remains the most favored genre, boasting over 730 million viewers in 2022, a 21% increase from 2021, within an overall TV universe of 900 million, leaving ample room for expansion. IPL generates revenues of approximately Rs 3,000-4,000 crore, encompassing 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 trail TV, which is expanding at 10-12%. Despite a 50-50 split in content cost between TV and digital, there exists a significant monetization gap. While digital viewership is on par with TV and could potentially surpass it, generating equivalent ad revenue is challenging in this highly competitive segment.