Mukesh Ambani’s group eventually dropped its pursuit of the television broadcast rights to India’s top cricket league, which Walt Disney Co. had secured for $3 billion because the Indian conglomerate saw limited long-term profit potential from the legacy platform.
According to a person familiar with the group’s strategy, the joint venture between Ambani’s Reliance Industries Ltd. and US media giant Paramount Global is instead focused on winning the rights to digitally stream the lucrative Indian Premier League, betting that its advertising revenue will be four times that of TV in five years. According to the person, who did not want to be identified because they were discussing private deliberations, television would struggle to deliver double-digit growth.
While Viacom18 Media Pvt., the Ambani-Paramount joint venture, bid for TV rights in the early rounds of the auction, this person said the company’s priority was always to secure digital rights. A Reliance Industries representative declined to comment on the auction strategy.
Viacom18 paid $238 billion ($3.1 billion) for the rights to stream the IPL tournament, one of the world’s most-watched sporting events, a sum nearly equal to what Disney paid. The decision is consistent with Ambani’s goals for his digital unit, Reliance Jio Infocomm Ltd. The billionaire, who is currently India’s richest man, wants to build a consumer ecosystem that combines entertainment and e-commerce in order to attract local users who are becoming increasingly reliant on their smartphones.
The decision to sell television rights saved Reliance billions of dollars, funds that could be used to boost the conglomerate’s chances in the upcoming 5G spectrum auction in India. A popular cricket broadcast, which can attract millions of new subscribers, streamed over a fast wireless network can be a powerful combination for boosting Jio.
In a separate interview, Jay Shah, the head of India’s Board of Cricket Control, stated that the country could have 900 million internet users in five years, highlighting the importance of digital rights. While television was once the primary source of entertainment in middle-class households, the past few years have seen a rapid shift toward online streaming, which has been exacerbated by the pandemic.
According to this source, Reliance will use its IPL rights as a tactical asset to building out streaming and digital platforms such as Voot and Jio. Viacom18 has already secured media rights to soccer, badminton, tennis, and basketball events, giving it a diverse sports portfolio.
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