Is Reliance planning a big bang entry in sports broadcasting?

Sources say that the groundwork is already underway with the group planning to recruit executives from rival broadcast networks

e4m by exchange4media Staff
Updated: Sep 6, 2021 5:22 PM

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reliance sports channel

The media industry has been abuzz about Reliance Industries venturing into sports broadcasting through Network18 Group and Reliance Jio. Their first big content acquisition bid is likely to be the all-important Indian Premier League (IPL) media rights auction, the process for which will reportedly start towards the end of 2021.

If sources are to be believed, the media group has begun the process of building its sports broadcasting team. exchange4media has learned that the conglomerate is looking to tap executives from rival broadcast networks.

As reported recently by exchange4media, Disney+ Hotstar SVP & Head of Advertising, Gulshan Verma has joined JioAds as CEO. “Another senior ad sales executive from a broadcasting company who recently stepped down might also be in talks with them,” a source said.

Emails sent to Network18 and TV18 MD Rahul Joshi and Reliance Industries seeking comments for the story remained unanswered till the time of filing this report.

The sports channel launch, as and when it happens, could be done through Network18's broadcasting subsidiary TV18, which owns a majority stake in Viacom18. TV18 owns and operates 57 channels in India, spanning news and entertainment.

Viacom18, which is a 51:49 JV between TV18 and Viacom, houses the entertainment channels of the Network18 Group. The entertainment network has a presence across genres like GEC, movie, regional, kids, English entertainment and youth/music. The only significant missing piece from its portfolio is sports.

The network has been experimenting with sports properties in the recent past. In July, Viacom18 picked up LaLiga rights for India. The tournament will be aired on Voot and MTV. In 2018, it had acquired Nidahas Trophy and had aired it on the Hindi movie channel Colors Cineplex.

The network has been toying with the idea of venturing into sports, however, the brutal economics of the sports broadcasting business hasn’t permitted it to go the whole hog. However, the equation will totally change when Reliance Jio comes into the picture vis-à-vis IPL and other sporting rights.

It is pertinent to note that Reliance Jio, the telecom arm of Reliance Industries, had also put in a bid for IPL digital rights and BCCI media rights in the previous round.

For the upcoming IPL media rights auction, Jio might place a consolidated bid for both TV and digital. In 2018, Reliance Jio had inked a five-year non-exclusive deal with Star India for the home bi-lateral matches played by Team India.

According to a recent report by Media Partners Asia (MPA) on the Indian SVOD market, Disney, Amazon, Facebook, Jio and Sony are expected to battle it out for the coveted IPL media rights. IPL is the biggest media property in India from both reach and monetisation point of view.

For Jio, the IPL media rights could play a pivotal role in pushing the adoption of its JioPhone Next, an affordable smartphone which it is launching in partnership with Google. JioPhone Next is expected to grow the smartphone penetration in India, which currently stands at 760 million, according to Statista. Jio is targeting the next 500 million smartphone users in India through JioPhone Next, and IPL will come in handy in achieving this goal.

To understand the scale of IPL on TV and digital, consider the following data. IPL 2020 had a platform reach of 260 million on Disney+ Hotstar. Buoyed by the stupendous response, Disney+ Hotstar is targeting a platform reach of 260-280 million for IPL 2021.

According to an industry source, Jio has built the infrastructure to grow this number by 3x to 4x. “If Jio manages to win IPL media rights, the scale of the tournament will reach an unprecedented level. It will be a never-seen-before scale,” the source said, on the condition of anonymity.

The numbers on TV are even more staggering. IPL 2020 was watched by 405 million viewers, which is almost half of the Indian TV universe. Star India, the official broadcaster of IPL, garnered a cumulative reach of 352 million in the first 26 matches of IPL 2021.

“The launch of the sports channel will create a walled garden as users will not be able to go to any other platform outside Reliance Jio/Network18. A sports channel will also bring in big bang sponsorship money to recover the high cost of acquisition,” the source added. “This kind of scale will also likely bring unseen levels of monetisation. Thus, also significantly impacting the value of media rights.”
Star India had paid a whopping Rs 16347.5 crore to bag the IPL media rights for five years till 2022. This was almost double of what Sony Pictures Networks India had paid for the first 10 years of the IPL broadcast rights.
At the time Star won the IPL rights, it was widely believed that the broadcaster will not be able to achieve break-even. However, it has proven the naysayers wrong through aggressive monetisation on TV as well as digital both on the ad and subscription sides. With the current rate of monetisation, Star is expected to make a small profit on its IPL investments. Over and above that, the IPL has had a positive rub-off on the network due to its strategic nature

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