The Media Partners Asia's 'Insights & Intelligence' report entitled 'The IPL 2023 Test' stated that mobile supremacy and a CTV strategy will drive JioCinema to an estimated US$330-US$350 million in ad sales.
The ad sales for pay-TV which were at US$442 million in 2022 are expected to decline to US$220 million in the current year.
The report also mentioned that Star India's Indian Premier League (IPL) 2023 ad sales are expected in US$200-220 million range and there is a possibility that it might go below $200 million. Moreover, if Disney fails to make changes quickly, other VOD platforms such as Prime Video, JioCinema, and Netflix may take over as the new dominant players in India's premium VOD market.
IPL 2023 to settle macro mettle, digital delivery & TV's resilience
IPL, which will begin on March 31, comes at a time when there is an increasing overlap between the adoption of 4G mobile broadband, CTV and fibre broadband usage. On top of it, according to an Ericsson report, India is expected to have 500 million 5G subscribers by 2027. Another report by Nasscom states that 5G is expected to fuel up to 2% of India’s GDP, amounting to $180 billion, by 2030.
Furthermore, the pay-TV market is facing challenges due to the growing popularity of free satellite, the ubiquity and affordability of SVOD in urban markets and the free broadcast of the IPL. As a result, millions of mobile broadband users and CTV households will have access to free IPL streaming.
As per MPA's report, macro-level challenges are impacting the advertising industry, with domestic demand remaining strong until February 2023 but then beginning to decline.
Additionally, external demand has slowed down due to global macroeconomic issues that are expected to continue affecting the industry throughout 2023. The total ad investment in IPL 2023 advertising falls within a range of US$490-600 million, with committed spends totaling US$550 million based on MPA analysis.
While ad budgets are being pressured, many advertisers are reallocating their budgets for the event. Digital channels are seeing broad-based demand, but the advertising landscape has become chaotic and confusing for some advertisers, with unclear targeting and reach. Despite this, there have been some significant successes, with JioCinema's targeting capabilities gaining appreciation among brands in recent weeks.
The digital and pay-TV revenue for IPL in the US is nearly unchanged year-over-year (YoY) at $550 million, which is a significant decrease from the anticipated IPL rights fees of $1.2 billion between 2023-27.
According to the MPA’s report, this year, subscription fees are expected to be low due to issues with pay-TV distribution and the absence of a subscription fee for digital.
Auto, gaming & FMCG parking majority of their adex on digital domains
The budget allocation for Fast Moving Consumer Goods (FMCG) companies is expected to be divided mainly between TV and digital advertising.
However, businesses owned by Reliance Industries Limited (RIL), including retail and FMCG, will likely shift their advertising budgets to JioCinema, which will stream the IPL matches. The auto industry has already moved a significant portion of their advertising expenses to JioCinema, while new economy sectors like gaming have shifted their entire advertising budgets to the platform, the MPA’s report stated.
JioCinema’s penetration in TAM for CTV in India will reach 20-30 million during IPL 2023
Overcoming the obstacles of distributor fragmentation and the need for a high level of customisation is expected to be difficult in the pursuit of dominating the CTV market.
According to MPA, the total addressable market (TAM) for CTV in India is estimated to be 70 million. However, it is predicted that JioCinema's penetration in this market during IPL 2023 will reach 20-30 million, which will boost CPMs and improve the relationship between consumers and the platform through features such as multiple camera angles, 12 languages, 4K resolution, live statistics, and more.
JioCinema promised advertisers that the current year's IPL will reach 400 million individuals
Jio Cinema has made a promise to advertisers that the current year's IPL will reach 400 million individuals with a concurrent user base of 100 million. It is believed that JioCinema will be able to handle the scale and concurrency required for mobile broadband, as they have hired a significant portion of Disney+Hotstar's technical and engineering teams.
Jio Cinema has already started streaming major events such as the Women's Premier League and last year's Fifa World Cup to mobile devices. According to agency discussions, the targeting capabilities available on mobile are highly advanced and unmatched.
Star’s ad sales expected to reduce by more than half YoY to $200-220 million
As per MPA’s report, Star, the current broadcasting rights holder of the IPL, has faced difficulties from Jio and the challenging economic environment, resulting in a significant decline in pay-TV ad sales for the IPL 2023 edition.
The ad sales are expected to reduce by more than half YoY to $200-220 million, and there is a possibility that it might go below $200 million. Historically, subscription fees for the IPL have been in the range of $120-150 million, but they are expected to be impacted significantly in 2023 due to various factors such as NTO regulations, disputes with Reliance-owned cable MSOs, and Star's decision to broadcast 12 important IPL matches on its FTA channel, Star Utsav, the report stated.
If Disney fails to make changes, other VOD platforms may take over as new dominant players in India's premium VOD market
Disney + Hotstar is experiencing a decline in its popularity due to several factors. These include the absence of the IPL, the end of its partnership with Jio, budget limitations for entertainment and the discontinuation of important HBO content.
As per MPA’s report, these factors will reduce the value that the service provides to its subscribers. Although the second half of 2023 promises some interesting content such as the Asia Cup and the ICC fifty-over World Cup, the service is still facing challenges with the potential loss of around 15 million paying subscribers by the end of 2023. If Disney fails to make changes quickly, other VOD platforms such as Prime Video, Jio Cinema, and Netflix may take over as the new dominant players in India's premium VOD market.