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After solidifying his control of a $2 telecom carriage business, the world’s seventh-richest man is seeking his next fortune in a $1 content-streaming enterprise.
Actually, the spoils from the digital rights for Indian Premier League cricket, snagged by billionaire Mukesh Ambani’s Viacom18 by dethroning Walt Disney & Co for the next five years, aren’t even at the $1 mark yet. Disney+ Hotstar, primarily a service for cricket-loving Indians that’s also available in some other Asian markets, has 50 million subscribers and rapid growth. But the monthly average revenue per user for the partly ad-supported app is just 76 cents, a drag on what Disney+ makes from customers elsewhere who pay the full cost of entertainment.
The streaming rights for IPL, the Super Bowl of cricket, have gone for 205 billion rupees ($2.6 billion), according to media reports. Viacom18 Media Pvt, a joint venture between Ambani’s Reliance Industries Ltd and Paramount Global, is paying that amount for 410 matches over five years starting 2023, or $6.4 million per game. There’s a separate $3 billion TV deal for the Indian subcontinent, though it isn’t clear who has grabbed it; the Financial Times says Disney might have been retained it; other reports suggest Sony Group Corp is the winner. An official announcement will come after the smaller auctions — for non-exclusive digital content and overseas TV rights — that are likely to conclude Tuesday.
The headline-grabbing figure is the value bidders put on the streaming package, which is now worth almost as much as IPL on television. A big chunk of the credit for that catch-up goes to Ambani. His 4G Jio network disrupted the Indian telecom market with cheap data, acquiring more than 410 million customers since its launch in 2016. As Jio subscribers burn through their plans to watch cricket on their mobile devices, Ambani’s carriage business will get an automatic lift from his investment in content.
After a tariff increase, the telecom users are finally paying him a little more than
$2 a month; if he can get another $1 — by luring them with cricket and keeping them for other entertainment — his $38 billion-a-year consumer empire could bulk up some more.
Even so, it won’t be easy to make money on this new
investment at a time when surging inflation is crimping discretionary spending. That’s where the former 21st Century Fox executive Uday Shankar comes in.
However, staying ahead of Amazon and Adani are secondary considerations. The bottom line is this: Ambani has decided to spend billions on content, and now he has to earn it all back in five years.
—Bloomberg