IPL Digital Rights To Make Viacom18’s Voot Leading Player In Indian OTT Market: JM Financial

Viacom18 bagging the digital rights of the Indian Premier League (IPL) for the next five seasons would make its OTT platform Voot the leading player in the Indian market in a few years, brokerage JM Financial said in a report. 

While Voot currently has around 2% share in India’s OTT market, the IPL is likely to catapult it to the leadership position in a few years’ time, the report said, adding that Voot would also benefit from Reliance’s parentage as it can leverage the massive user base of telecom giant Jio.

Disney-Star lost the digital rights of IPL to Reliance-owned Viacom18 in the auction conducted by the Board of Control for Cricket in India (BCCI) in June. Viacom18 won the digital rights for the marquee cricket tournament for a whopping INR 23,758 Cr.

A lot of questions were raised on the media company’s ability to recover the huge amount. However, JM Financial said that the broadcaster’s digital arm Voot can break even in the fifth year (2027) of the upcoming IPL cycle.

Voot is estimated to reach 400 Mn monthly active users by 2027, the brokerage said. Moreover, the growth in users can result in advertisement revenue of INR 2,160 Cr and subscription revenue of INR 3,000 Cr by 2027 from IPL alone. 

“However, on a cumulative basis, Voot’s revenue over 2023-27 is likely to fall short of the media rights value it has paid, as per our current estimates. That said, the knock-on effect of IPL – higher subscribers and active user base and cross-sell opportunity – should help it recoup the media rights’ investment, in our view,” the report said.

Star India (which was rebranded as Disney Star after Walt Disney acquired 20th Century Fox in 2018) won the TV and digital rights for the IPL for a five-year period during the 2017 auction. Leveraging IPL media rights, the broadcaster acquired a leadership position for Disney+Hotstar in India’s crowded OTT market. After losing the digital rights, industry experts told Inc42 earlier that it could lose up to 50% of its subscriber base.

Meanwhile, Star India is expected to break even for its IPL TV broadcasting rights in the third year of current circle i.e. 2025. The broadcaster’s IPL driven ad-revenue is expected to grow at a CAGR of 10% to INR 6,100 Cr in 2027 from INR 4,100 Cr in 2023. 

“At an annual media rights cost of INR 4,7 Bn (5 year rights cost at INR 23.6 Bn), Star India can break even in 2025, the third year of the current cycle. Note, we have not assumed any incremental subscription revenue for Star India as they are the incumbent broadcaster for IPL,” the report added.

IPL’s reach now exceeds 400 Mn TV viewers and 300 Mn digital viewers in India alone. Although TV currently dominates IPL viewership, the tournament also benefits from the rising OTT user base as incremental viewership along with incremental advertising expenditure emanate from such platforms, the report added. 

In addition, the rising popularity of short form videos also helps IPL as a lot of unique viewers see specific events such as highlights and wickets. Hence, it expands the non-live user base and extends the match’s monetisation potential beyond live streaming, the brokerage said.