EkaLore has explored the shifts between vendors in the streaming market. This release looks at the media and entertainment markets in a Dynamic India, the trends, and how ongoing transformations will affect marketspaces. Disney and Viacom18/JIO take different strategies to achieve share and profit. Just like in the US, Indian households are cord-cutting. This is changing the profit landscape. But first, here’s a little context.
India's media and entertainment markets face similar transformations, as are changing consumer spend, content investment, and monetization across most large global markets. India has unique factors (language, culture, times of day, local interests). However, other global marketplaces, like the EU, share these. Like India, the EU has many languages and strong local sports team loyalties.
The key compelling trends of 5G, content ‘over the top’ with streaming subscription services, live content preferences, and highly competitive consumer choices are driving transformation in India as they are global.
The recent Disney+/Hotstar announcement of reductions of up to 4M subscribers (with an unknown churn rate) affected investor perceptions of Disney (that initially dropped by up to 8% of equity price). The loss of subscribers was widely attributed to reduced live event interest as Indian Premier League cricket 5G streaming rights went to Viacom18 (with Reliance JIO).
Disney spent about as much for digital-TV rights as Viacom18/JIO did for its mobile streaming rights. Disney has announced its satisfaction with the bidding as it added 11M more homes in the first 25 days of IPL competitions, achieving a reach of up to 90% of pay-TV homes. The pay-TV terrestrial markets for TV in India are seeing ‘cord-cutting’ as consumers use their mobile streaming-media access even more heavily. The ongoing conversion of TV sets to multi-access flat panels (accessible for larger format viewing from mobile devices) also changes consumer viewing habits
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Disney may have picked a good strategy for itself as the RS23,745 crore (USD$3B) IPL rights costs would not be offset by retaining the 4M subscribers for 5 years (ARPU of RS48 (USD .59)– RS 1,150 crore (USD$141 million).
With JIO’s likely movement of live sports content to a paid tier in the future, this will likely be a good choice for Disney’s margins. The future of cord-cutting in Indian pay-tv also affects Disney’s advertising and ‘pull thru’ streaming penetration. The extremely rapid increases in costs for IPL sports content may be justified by the huge increase (>100%) in the use of mobile to access live sports content in streaming mode. Local language commentary, multiple camera angles, and all the rest of live sports event coverage improvements in global media markets are being introduced to IPL coverage. As a strategy to build market share and advertising revenues by different media outlets, the IPL sports rights were key to the winning rights bidders. It is unknown how this will look in 5 years when the next rights competition occurs.
In the meantime – the game’s afoot!
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