IPL windfall notwithstanding, Voot has an uphill task to increase subscriber base

The e-auction for the much-anticipated IPL media rights for the 2023-27 period was noted for many firsts, the primary one being the prominence accorded to the digital rights. Reliance-backed Viacom18 winning the digital rights for Rs 23,758 crore is testament to the fact that digital is the future. With IPL in its kitty, the fortunes of Viacom18’s streaming platform Voot will definitely change for the better. Voot, which has around 2% market share in the OTT streaming ecosystem currently, will surely see its fortunes changing for the better with IPL in its kitty.

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“IPL will definitely change the fortunes of Viacom’s streaming platform Voot,” said Karan Taurani, Senior Vice President (research) at Elara Capital, adding, “Viacom’s streaming platform was running more in terms of catch-up TV content. They were one of the last ones to start fresh originals. They were the last one probably to start SVOD service, which is Voot Select. So, it has been a fairly late entrant in the OTT ecosystem. Now with IPL, the change definitely is inevitable. But one thing we need to watch is that whether they will be able to offer the same user experience of what Disney+ Hotstar would do for a compelling property like IPL. In case they are unable to do that or if the user experience is poor, they may not stand to gain a large subscriber base, because if the user experience is bad, people generally would like to watch it on TV. Then the subscriber base will only be driven by convenience viewing, which is on-the-go and transit, not in-home viewing.”

India is cricket and cricket is India. This still stands strong even with falling viewership, remarked Alin Choubey, Associate Vice President, Chimp&z Inc.

Choubey agreed that Voot has a great opportunity not just to increase viewership, but also the market share. “The everlasting IPL fever was not just increasing the viewership of their streaming partner, but also their opportunities with sponsors, fantasy games, and sports/news information sites coverage that can be leveraged for increasing sales, ad revenue, and brand visibility. Voot has a mammoth task to convert this into a justifiable revenue stream with quality content as well,” they added.

“Viacom18 has spruced up its sports offering with Sports18, its dedicated sports channel, which obviously will be the destination for IPL next, which could be integrated into the services offered by Voot,” remarked Vinay Hegde, Chief Buying Officer, Madison Media. “Viacom18 has said it will be able to take India’s biggest sporting event to every nook and corner of the country, so JIO obviously will be playing the big role of providing the much-needed push to attracting subscriber base,” he pointed out.

Following Hotstar’s footsteps

CupShup Co-founder Sidharth Singh is certain that Viacom18 would like to repeat the success story that Disney+ Hotstar has scripted in recent times. Even before the acquisition by Disney, Singh said, Hotstar won the IPL rights and the cricket-crazed subscribers thronged the OTT for daily viewing.

“From a newbie, Disney+ Hotstar now corner 26% of the OTT market.  From a mere 2% of market share, Voot would like to take a similar path and replicate the trailblazing path that Hotstar has shown. While it is in an advantageous position to leverage as it has got plenty of Bollywood masala already on its platform and the combo of Bollywood + cricket is unmatchable when mixed proportionately, a 30% drop in viewership of IPL will definitely get talked about in the board room. What steps the BCCI takes to make it more appealing for viewers and how Voot will combine this with its existing content to increase subscriber will be interesting to see in coming times,” elucidated Sidharth Singh.

IPL is arguably the biggest broadcast event in India, but it is unlikely to change the fortunes of Voot on its own, feels an industry insider, who wishes to remain anonymous. The streaming platform will need to offer significantly more to attract viewership, just like Hotstar did, he added, further noting, “More than 70% of ICC’s revenue is generated from India, so streaming other cricket leagues could help them in gaining subscribers. And now that the bidding of ICC broadcasting rights is around the corner, the streaming platform can take advantage if they bid for that too.”

According to him, Voot will also need to generate enough ad revenue, which is very difficult as they currently stand with just a 2% market share in the OTT streaming space compared to 26% of Hotstar. They will need to focus on increasing that by streaming engaging content and maybe lowering their subscription rates.

Is IPL enough?

IPL content alone will not be enough for Voot to attract a huge subscriber base. It should be mentioned here that Hotstar had rights to many other properties such as South African cricket, Ranji Trophy, etc. Voot, however, is short of attractive cricket or other sports properties. How important it is for Voot to acquire fresh content to ensure long-term customer stickiness and loyalty? Will it be able to do that?

Sidharth Singh asserts that Voot must plan for acquiring other properties along with IPL to attract subscribers and he is sure that the management must be working on the same.

“For a price-conscious market like India, you cannot ask for a yearly subscription based on a two-month event. In addition to that, all IPL followers aren’t seasonal cricket fans who get active during that period. A majority of this fan base follows cricket round the year and root for their favourite players during this mega event. Also, Indians do not go for multiple subscriptions. Thus, for Voot to attract subscribers to its platform and give up other platform’s subscription, they will have to offer a variety of content to its subscriber. While Bollywood content might come handy, to compete, it must add other cricketing offerings to its kitty,” added Singh.

According to Alin Choubey, while IPL will give Voot a new viewer base, fresh engaging content and partnerships will be the sustenance for it. “If a player like Netflix is struggling due to multiple reasons, then Voot has to take this proactively even before the streaming starts. I have my money on Voot. With shows like ‘Asur’, ‘London Files’, etc. I do see the content team’s capabilities to up their game as the stakes are at an all-time high,” they added.

Analysts are certain that fresh content, in addition is IPL, is a necessity to ensure subscriber stickiness.

Voot paid a hefty premium of about Rs 23,000-odd crore for the streaming rights, they will need to generate enough ad revenue, says the industry insider who wishes to remain anonymous. Adding further, he said, “But until they have more subscribers, they won’t be able to command higher ad rates. Increasing the viewership is at the centre of it all. Voot currently has only two minor cricket events under its belt: Road Safety World Series and the Abu Dhabi T10 league. Gaining more sports streaming rights and acquiring more original content will be pivotal to the growth of the platform. The two-month-long sports extravaganza alone won’t be able to increase its market share, but with strong support from other content properties, the feat certainly looks achievable.”

Karan Taurani felt that IPL definitely has the potential to attract large subscriber base. According to him, close to 70% of the users of a Disney+ Hotstar was driven by sports content, which is cricket. And within the cricket content, added Taurani, it is fair to say that 90% is driven by IPL, because other properties are sporadic in nature. For example, World Cup comes once in four years. T20 World Cup comes in two to four years. So, IPL was a compelling property with maximum number of days, close to about 55 days every year. That is a big amount of time. “So, my estimate is that in the initial years, the MAU/DAU metric or the number of subscribers for Star would come down by 50-55% just because of IPL. If at all, they lose the other cricketing properties, the number can even go higher,” he pointed out.

The industry source reminded here that, “We should not forget that Voot is a product of Reliance, which has a huge hold on the Indian broadcasting industry.” Continuing further, he said, “It can also leverage Reliance Jio’s existing customer base of over 400 million, and direct them towards their content. ICC streaming rights will also be a massive opportunity for them to acquire sports content and ensure customer loyalty. So yes, they can definitely increase their viewership until the IPL comes, but the path will not be easy. IPL content alone is not likely to turn the tables for Voot. Getting fresh and rich content properties will be the key to their successful growth in the digital streaming industry which is already very competitive.”

Fresh content

Analysts asserted that it is very important for Voot to acquire fresh content.

IPL no doubt is compelling as a property; it will change the fortunes of Voot in terms of customer retention and stickiness, says Taurani, adding they have to make the most of it, because IPL is a five-year phenomenon.

“As a strategy,” he added, “Voot should try and make and acquire a lot of original and fresh content on their platform apart from just IPL. Because this is a very good opportunity to cross-sell your other content basis the IPL audience which you receive. Hotstar typically has been following the strategy; they got a huge variety of other content apart from IPL. Voot should not only be piggybacking on IPL alone. For a longer term, they should acquire more fresh content and originals, which will lead to cross-selling of IPL customer base which is there.”

IPL will attract a subscriber base for that period. Voot will need fresh content to ensure that the subscribers stick on, maintains Vinay Hegde.

“Sports18 will be the new home to the world's most premium sports properties, including the FIFA World Cup Qatar 2022, NBA, LaLiga, Ligue 1, Serie A, Abu Dhabi T10, and top ATP and BWF events and will provide fans access to top programming covering international sports news, magazine, and highlights shows. So Viacom seems to be prepping up though it may yet be short of cricket which in India continues to be the biggest draw. This in addition to newer entertainment and original content will be required to ensure long term stickiness,” says Hegde.

According to Taurani, Voot’s AVOD model was primarily driven by catch-up content; they didn’t have any originals as well. IPL will definitely increase its market share.

“In terms of market share numbers, Disney+ Hotstar is somewhere around 1,100 crores out of 7,000 crores. That is almost 16 to 17 percent. If 17 percent of that revenue is going to flow to Voot, automatically somewhere around 10 percent of the AVOD market is dominated by IPL. So, because of IPL, the AVOD market share of Voot will move to 10 to 12 percent in the immediate term. Then basis how they are able to sell their inventory and leverage upon the property, that will determine the further market share game from here on. But there is a huge market share jump; Voot AVOD market share will jump 5 to 6x at least because of IPL,” explains Taurani.

Because of IPL, adds Taurani, it will get a large subscriber base and basis that it will be able to command a higher price because in digital it is all driven by eyeballs. It is a correlation. IPL will drive eyeballs, which in turn will command better pricing.  

Market share

As of now, Voot commands a market share of only 2%. Will IPL alone increase its market share and subscriber base substantially? Will the OTT platform need a lot more subscribers to command higher ad rates?

The current market share dynamics should be undergoing some change with IPL changing hands and Viacom with Sports 18 looking to have a larger share in the sports pie, says Vinay Hegde. However, he adds, sustaining that base going forward will be dependent on content, customer stickiness, and loyalty.

Voot needs to up its tech game to sustain a tsunami of users flooding the app and platform, says Alin Choubey. He feels that the subscription rate will increase, but sustaining it will be a task just based on IPL. “The subscription price and model will also have to adapt as per IPL to continue pulling the user base and keep a healthy balance of users. The subscriber base won’t be the only thing that will drive the game. An optimal experience is something that drives the viewers as well,” he said.