JioCinema Looks to Dominate the Live Sports Streaming Space

Argentine footballing legend Lionel Messi scripted history when he scored a brace to help his country lift the FIFA World Cup held in Qatar this year.

In India, Mukesh Ambani-owned JioCinema also scripted history as nearly 32 million viewers live streamed the event on its platform. Previously, the record was held by Hotstar when the Indian Premier League (IPL) final between Mumbai Indians and Chennai Super Kings in 2019 was reportedly watched by nearly 18.6 million people.  

The live sports streaming space has emerged as the golden prize for OTT platforms and JioCinema is the latest player to disrupt the market. 

So, with JioCinema entering the live sports streaming space in India, what could it mean for the likes of Hotstar and SonyLiv and other OTT platforms which were already live-streaming sporting events in India?

JioCinema already has big plans

JioCinema, owned by Viacom 18, a subsidiary of TV18 (owned by Reliance), spent around INR 450 crore to get the streaming rights for the FIFA World Cup. However, JioCinema decided to stream the event completely for free.

Many industry experts believe JioCinema used the FIFA World Cup as an experiment to test their servers and their load capabilities as they gear up for the main event—IPL.

JioCinema won the digital rights to stream IPL on their platform for the next five years. The OTT platform outbid its competitors by paying a whopping INR 23,758 crores.

The money spent might sound staggering; however, over the years, Hotstar has proved that live sports streaming is a lucrative space for OTT platforms. 

Hotstar only makes a small portion of its revenue from subscriptions; a major chunk comes from advertising. So, back in 2017, when Hotstar paid INR 16,347 crore to acquire the five-year TV and digital rights of the IPL, it raised several eyebrows, too—with many citing it as absurd. 

But, as per reports, Hostar earned around INR 2500 crores in ad revenue during the last year’s IPL, with charges ranging from INR 10–15 lakh for a mere ten-second slot. Additionally, they may make money from sponsorships and advertising deals with leagues and teams streaming their games.

Live sports streaming: The golden prize

For the first time ever, digital viewership overtook TV for a global sports event during the recently held FIFA World Cup. More viewers watched the tournament on JioCinema, compared to the television in India. This indicates why live-streaming sporting events have emerged as a lucrative proposition for OTT platforms. Further, it also brings in endless advertising opportunities.

According to a report titled, Sports broadcasting on TV: A match made in heaven, revenues for sports from digital platforms is forecasted to reach INR 4,360 crore by 2026, growing at a compounded annual growth rate (CAGR) of 22%.

Primarily, Hotstar was the go-to platform to livestream cricket in India, but not anymore. Amazon Prime is also eyeing the space and has already live streamed the India–New Zealand series. SonyLiv, which livestreams UEFA’s Champions League and Europa League, also streamed the India–Bangladesh series this year.

The space is set to get populated further as Netflix is also warming up to the idea of live-streaming sporting events on its platform. Netflix lost nearly 1.2 million subscribers in 2022, and the company wants to diversify its revenue stream by venturing into this space.

In India, Netflix might be unable to compete with JioCinema and Hotstar for streaming rights to major sporting events. Still, it could earn streaming rights for other sporting events such as Kabaddi, Hockey and Badminton.

Similarly, YouTube also recently secured streaming rights to broadcast some US National Football League matches from next season. In a few years, Google-owned YouTube could turn its eye to live sports streaming space in India.

Impact on Hotstar

Star India Private Limited, the company that owns Hotstar, still has the TV rights for IPL. However, digital viewership for IPL is expected to increase further in the coming years, which means Hotstar will miss out on significant ad revenue. According to Elara Capital, Hotstar alone generated around 70% of Star India’s ad revenue.

Another argument in Hotstar’s favour is that it will continue to stream major tournaments involving the Indian cricket team or other major cricketing tournaments like the recently held T20 Cricket World Cup. Nonetheless, with JioCinema set to live stream IPL for the next five years, Hotstar could lose 15–25 million subscribers, according to reports. 

This is because many have subscribed to Hotstar just for sporting events, especially IPL. Now, since JioCinema has streaming rights, the users are expected to migrate to subscription plans offered by JioCinema. This could severely impact Hostar’s plan to reach 260 million subscribers by 2024.

Further, experts believe that the edge Hotstar had over other OTT platforms in India was cricket, particularly IPL. Karan Taurani, Senior Vice President and Research Analyst at Elara Securities, believes that Hotstar might lose 40–50% of its subscriber base.

Hotstar has lost its crown jewel in IPL, which will definitely impact its business and market share. However, citing a report by Elara Capital, Business Insider reported that despite having the streaming rights for IPL over the last few years, it did not have a significant impact on Hotstar’s profits implying that losing the streaming rights won’t impact its profitability as significantly as many would like to believe.