‘Confident of making good return from IPL’
9 min read . Updated: 02 Feb 2023, 11:50 PM IST
PremiumToday, you have 700 million internet-enabled devices in this country and our objective is to reach everyone, Jayaraj said
Viacom18, the Reliance Industries-controlled broadcast network, outbid rival Disney Star in 2022 to pick up the five-year digital rights of the Indian Premier League with a break-the-bank bid of ₹23,757.5 crore. In January, it also picked up rights to the Women’s Premier League for ₹951 crore. While the math of the high-value bids doesn’t make sense, Anil Jayaraj, Viacom18 Sports CEO, said the company will not just breakeven in five years, but also deliver good returns on its investments. In a candid interview, Jairaj shared the IPL plans and the rationale behind the bids. Edited excerpts:
You surprised the world with your bid for the IPL digital rights. How do you plan to take it to the audience?
When we acquired the digital rights, we were quite clear that we want to make IPL the biggest sporting event the world has ever seen. We started with that objective and that’s what we want to do. How do we revolutionize long-form content digitally the way it hasn’t happened? What do we need to solve? First, is affordable. So this year, there is no price to the consumers. This means, there is no charge, it can be accessed by anybody. Second, and it’s the natural advantage of digital, is that it can be accessed from anywhere and anytime; and third, we want to do it across multiple languages, including those in which it has never been presented. So we will have a panel of 70 commentators across 12 languages; at least 4-5 of these have not been done before. We will ensure it is a spectacular event, and we will deliver completely friction-free access to audiences.
Disney Star, that has the TV rights, is targeting 500 million for the IPL on TV. I hear Viacom18 can get around 350 million. Do you agree?
Today, you have 700 million internet-enabled devices in this country and our objective is to reach everyone. Practically, we could hit upwards of 550 million is my guess. If I look at accessing IPL, which is like a TV reach, which is 1 minute. Having said that, the real thing about digital is when an advertiser says he wants to buy a 300 million reach, it’s not this one-minute reach, and we will actually serve the ad to 300 million people. And, only if they see the ad, the advertiser will pay us. We are actually focused on delivering really superior customer experience, ensuring access goes well beyond whatever has been. If you do some of the back calculations, while it sounds big if you see what had happened before and then sort of do some basic extrapolation on the basis of what has happened to the internet-enabled devices, we believe it’s not unfair for us to target 550 million on the back of all innovations we have planned, including multiple languages and an enormous amount of surround content and stuff. We are actually very committed to giving people a real, engaging and unique experience. We are also going to do 4K with multi-cam feeds, so, as a consumer, you can actually choose the camera angle.
How are you looking at the increasing adoption of connected TVs?
Yes, they are a big focus area because, in the last few years, connected TV population has gone up significantly; HD is basically converted to connected TVs. As per a Google report, as of April 2022, there are almost 25 million connected TV homes in India, which is significantly bigger than the high-definition watching population of cricket, so that’s the other big focus.
On the other end of the spectrum are free-to-air (FTA) viewers. Earlier, Viacom18 said it will reach to those viewers. What’s your plan?
FTA audience, which is growing, didn’t have access to IPL, or at least, access to all the games. But the 50 million FTA homes translates into 200 million individuals, and most of them have access to mobile phones and smartphones. So, potentially, each of them is a consumer for us. That’s the way we are looking at it. We’ve done enough stress testing on these numbers and we feel pretty confident that we will be able to provide them with content which will be long-lasting, rather than just four hours of the game.
With your bid and per-match production cost of ₹2.5-3 crore, you will incur costs of about ₹5,000 crore on IPL. Will you make losses from that?
I can’t get into revenue and loss numbers, but we are not saying IPL will be free forever. This season, our intent is to provide the biggest sporting viewing experience ever. The great thing about digital is that we can work across any scale. So, if there is an advertiser who wants to reach 550 million people four times, we can do that and, similarly, if an advertiser wants to specifically target, say, a 25-year-old woman in Kochi having an iPhone, it is also possible. Unlike television, you do not have to buy a spot here, which is why we can have multiple cohorts, and multiple calls, which advertisers can make based on their target audiences.
On a cost-per-thousand basis, will the rates be higher than Disney+Hotstar’s ₹210 last year?
We are ensuring on CPM basis, despite everything that’s available, an advertiser will not have to pay as much he was paying last year on digital. In a way, we’re adding more target options, not taking up CPMs.
But how is the market response so far, considering that the advertisers’ sentiments are still low and from ₹4,000 crore that IPL did in ad revenues last year, to now two of you -- Disney Star and Viacom18 -- going after the same set of advertisers?
To be honest, I’m not so sure that sporting events get impacted. Every time, IPL has done better, year-on-year. Now, look at it from last year’s number, whatever the number was, my question is, was that the maximum possible from a demand point of view? It was sold completely, but this time, the digital inventory will be much more. And while it’s not strictly comparable, we are seeing a lot of demand coming through from consumer companies as well as auto companies, etc, which were not as strong last year. So the market is quite different again.
Even if the market conditions are not ideal, IPL tends to grow quite dramatically over the previous year. Also, every time the media rights are sold, the market gets reset a bit. But, we will go to the market with the view that the CPMs need to be really attractive to advertisers. Finally, if you deliver great viewership and great concurrency, ad dollars will follow.
Then why are you keeping CPMs low?
The number of impressions we are going to go with to the market is unbelievable and quite literally, unheard of. So we want to move significant monies to this venture. Secondly, We want to reach a very large number of advertisers. A lot of the advertisers, who will come in now, will tend to become bigger advertisers later. So if you actually have a barrier like a high outlay, that actually prevents it from happening. Now, if we can deliver to them, and it works for their businesses, we will have even greater demand in the coming years.
So which year are you going to break even?
When you look at these large numbers, one does get paralysed into thinking you know, how do I do it every year etc. And quite honestly, the absolute free access that is there this year, may not be next year. So our business model will change. We are working with various possibilities and the only thing we are focused on is that we need to deliver our business results and at the end of the five-year period, we should make a good return. Now whether we break even in the beginning or in between or the end actually does not matter. We have to make money on the property and that’s the goal.
You also picked up the rights for the Women’s Premier League, paying significantly higher than rival Disney Star. What was the rationale? Our estimate is that you will make a loss of over ₹600 crore on that.
That’s your estimate, but one thing which the market is probably not done right is to not look at it as a completely new sport. For us, this is not men’s IPL repackaged. We want to make it exciting and new. The BCCI is already quite focused on ensuring that this becomes quite big and we want to take this opportunity and completely help reshape this sport. So yes, if you look at it purely from the math of what happens currently in women’s cricket, (the match) won’t make sense but that’s not the way we’re looking at it. We want to look at it as an opportunity to reshape cricket. This is a pure business decision, something that was good for our brand and good for our business. So that’s what we’re focused on.
We are looking at it to see how can we make this as IPL did to men’s cricket -- in a way which is differentiated, exciting, and certainly attracts a whole genre of new viewers. And see, we have all the ingredients, the Women’s under19 team just won the World Cup, and this was a huge philip for us. Similarly, there are quite a few people who think like us, maybe not all broadcasters, but certainly, the team owners, who also believe in this philosophy. Also, look at the advertising and brand endorsement demands that exist for some of the women cricketers, all of them have a massive following. We are pretty certain that this has the potential to be the biggest women’s sport anywhere in the world.
But your bid was at least ₹800 crore more than the second bid, which was only for digital. What was the rationale to place such a bid?
So it was for the simple reason that it was a closed bid and we wanted to be sure that we have rights for digital. If the way to ensure that was with TV, so be it. We are very clear that for the right asset, we are willing to pay a premium, but for the wrong asset, we won’t pay even a discounted rate. This is the right asset and we honestly are quite excited.
Also, in a closed bid, the only way to prepare is to be sure about your business case and your brand case and come up with a number.
Women’s Premier League will come before IPL. How are you planning to take that up?
We will be following exactly the same strategy in digital, we will monetise it quite aggressively. We are clear that we are not going to discount it compared to men’s IPL because there is a separate audience. Now television will be different. We believe the demand is quite soft right now on TV. So we will figure out how it does.
Will you be open to putting those matches on your free-to-air channel?
We may, but it’s not something that we’ve taken a call on yet.
