Star India Pvt. Ltd made an ambitious bet on the Indian Premier League’s (IPL) digital rights last year. It now seems that its aggressive strategy may be working.
The company’s Hotstar mobile streaming app has more than doubled its viewership to 100 million in the ninth season of the IPL—from 41 million at the end of the previous season.
Ajit Mohan, chief executive officer, Hotstar, said the milestone gives the company confidence to put its live sports content behind a paywall in the next few months.
That may help the company, which media buyers estimate generates about Rs.40-50 crore in advertising revenue from an IPL season, bring in additional revenue.
In February 2015, Star India bid Rs.302.2 crore to win the global Internet and mobile rights for IPL for a three-year period, beating Times Internet Ltd and Multi Screen Media Pvt. Ltd.
While nobody expects the IPL digital rights property to be profitable in itself, the popularity of the sports events will help Star India draw valuable viewers to its Hotstar platform, which also sells subscriptions for movies and TV series.
Hotstar recently started selling its most popular international TV series and films, largely from the 21st Century Fox library, for a monthly subscription fee of Rs.199. It has more than 85,000 hours of drama and movies in eight languages, and coverage of every major global sports event. Launched in February 2015, the Hotstar app has been downloaded by more than 68 million users across devices and platforms.
Mohan said that the growing viewership indicates the sense of comfort that users have with the digital medium.
“Online viewers are no longer a small, niche category; it’s a large user base now. We believe we have made a huge contribution to the IPL by bringing in a new audience base to the tournament,” said Mohan.
Mohan is referring to the millennials in the age group of 18-24 which made up more than 50% of Hotstar’s viewership base. While most do not watch the entire match online, the average time spent per user ranges between 30-35 minutes, according to Hotstar. The viewership on Star India’s multi-sport digital platform peaks at 8-9pm—the same time when an IPL match (evening slot) begins.
“This consumption pattern is led by (the view that) we don’t have control of the (TV) remote (in the house)—this is the most common thing that we have heard,” added Mohan.
The majority of the users (61%) accessed the matches on mobile handsets and live in the top 10 metros, including Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Chandigarh.
The first screen for the IPL still remains television but the nature of the game is such that if you are missing parts of it then you take to digital screen consumption, said sports management veteran Harish Krishnamachar.
“IPL has got the stickiness so you want to stay updated all the time. Having said that, the mobile screen has not replaced television, which is still the first choice especially when you are likely to watch it with a group of friends or in a larger group,” said Krishnamachar, who is now the founding partner at consulting firm Sportoid Sports Solutions, launched earlier this year.
For Hotstar, IPL-9 saw participation from 32 advertisers, including Hindustan Unilever Ltd, Nestle India Ltd, Vodafone India Ltd and Amazon.
IPL’s official broadcaster Sony Pictures Networks insists that despite growing Internet use, sports consumption in India is still television-led. “Sports have always been TV-led, not just in India but all over the world. In fact, digital aids traffic to television as people have constant access to real-time updates,” said Rohit Gupta, president at Sony Pictures Networks India. The reach of IPL-9 on television, minus the final between Royal Challengers Bangalore and Sun Risers Hyderabad, stood at 357 million, according to Sony Pictures Network.
Commenting on the potential of online sports subscription in the country, Gupta said there will be no monetization immediately. “We tried the paywall with Fifa around two years back, it didn’t work. The monetization will be negligible,” he added.
According to the Telecom Regulatory Authority of India (Trai), the number of broadband subscribers soared by 60% to 136.53 million at the end of December 2015, from 85.74 million a year earlier.
Internet users in India grew by 40% in 2015 to 277 million according to a report by Kleiner Perkins Caufield Byers, a Silicon Valley venture capital (VC) firm, that was released last week.