Shifting tides: The impact of Disney-Reliance merger on IPL advertising landscape

The recent merger between entertainment giants Disney and Reliance is sending seismic ripples through the cricketing world, particularly in India, where cricket is more than just a sport; it's a cultural phenomenon. As the Indian Premier League (IPL) stands at the intersection of sports and entertainment, it finds itself on the cusp of a transformational shift in its advertising landscape. With this mega-merger on the horizon, questions abound regarding how this consolidation will reshape the advertising rates and accessibility for brands with their alacrity to associate themselves with one of the world's most-watched sporting events. Will this alliance pave the way for greater innovation and strategic collaborations, or will it raise concerns about monopolistic practices and a lack of healthy competition? As stakeholders brace themselves for what lies ahead, it's imperative to dissect the potential implications of this union and its ripple effects on the IPL's advertising ecosystem.

Big impact

We all know that the IPL, cricket's biggest Twenty20 extravaganza, is synonymous with high-octane action and a massive viewership. This translates into a goldmine for advertisers, and the upcoming merger between Disney and Reliance promises to reshape the IPL advertising landscape.

Previously, Star Sports, owned by Disney, held the exclusive broadcasting rights for the IPL. However, the merger with Reliance, which owns Jio Platforms, creates a behemoth with unparalleled reach. This consolidation could impact IPL advertising:

Increased inventory and audience targeting: The combined entity will control Star Sports and Jio's digital platforms, creating a vast inventory of ad space. This allows advertisers to reach a wider audience across traditional television and the ever-growing digital landscape. Additionally, with access to Jio's user data, advertisers can potentially target specific demographics with laser precision.
Premium pricing and new formats: The merger strengthens the broadcaster's position, potentially leading to premium pricing for ad slots. However, this could be offset by offering innovative advertising formats. Imagine interactive in-stadium experiences or targeted product placements within the virtual reality broadcasts being explored by the IPL.
Focus on regional languages: Jio has a strong presence in rural India, and the merger could lead to a greater focus on regional language broadcasts. This opens doors for regional brands and caters to a previously untapped audience segment for advertisers.
E-commerce integration: Jio's e-commerce platform could be integrated with IPL broadcasts, allowing viewers to seamlessly purchase advertised products. This "shoppable experience" could revolutionize advertising during live matches.

While the merger offers exciting possibilities, challenges remain. The dominance of one entity could stifle competition and potentially lead to inflated ad rates. Additionally, ensuring a smooth integration of Star Sports and Jio's advertising teams will be crucial to avoid disruption.

Now, let’s hear from experts.

Mandeep Arora, MD & Co-Founder, UBON, is certain that the Disney-Reliance merger is poised to reshape the IPL's advertising dynamics, potentially influencing rates and accessibility for brands.

According to Arora, with Disney's extensive media portfolio and Reliance's strong presence in India's retail and digital sectors, the merger could lead to bundled advertising packages spanning multiple platforms, offering brands broader reach and engagement opportunities. However, he adds, concerns about reduced competition may arise, potentially limiting options for brands and impacting pricing transparency.

“Additionally, the consolidation could prompt regulatory scrutiny regarding market dominance. Overall, while the merger offers synergies and expanded reach for advertisers, careful monitoring of competition and regulatory compliance will be essential to maintain a fair and competitive advertising landscape within the IPL ecosystem,” he says.

Neha Soman, Co-founder and Chief Business Officer of Hypergro.ai, feels that advertising rates might increase as a fallout of the merger. She reckons that the merger between Disney and Reliance is anticipated to have significant implications for IPL advertising.

“With the combined resources and market presence of both entities, there is likely to be heightened competition for advertising space within the IPL. As a result, advertising rates may increase, posing challenges for brands seeking to secure prime placements. It will be interesting to see how Reliance is able to leverage this opportunity to promote their own products and services,” she says.

The Disney-Reliance merger is a big deal for IPL advertising, opines, Russhabh R Thakkar, Founder and CEO, Frodoh World. “It might impact rates and access. We foresee that the merged entity will have more leverage to increase advertising rates. They control the dominant share of the market (75-80% according to Redseer Strategy Consultants) and both major streaming platforms (JioCinema and Hotstar). This could make advertising during the IPL more expensive for brands. With a stronger bargaining position, the merged entity might prioritize deals with bigger brands willing to pay premium rates. Smaller brands might struggle to secure prominent ad spots. Also reduced competition too is a major concern. Previously, Star India and Viacom18 competed for advertisers, leading to potentially more favourable rates for brands. If there's one big player, it could stifle competition,” he adds.

On the offset, Thakkar adds, regulators might investigate the merger due to these competition concerns. The dominance in cricket broadcasting too might raise red flags.

“On the positive side, with one main point of contact, advertisers might find it easier to navigate the IPL advertising landscape. Gone could be the days of juggling deals with separate companies (TV, digital). This streamlined approach could save time and resources for brands. Also, it will become a data powerhouse as the merger combines a massive amount of viewer data,” adds Thakkar.

Concurring with the rest, Sachin Kumar, Founder, Bottle Openers, feels that the anticipated Disney-Reliance merger is expected to have a significant impact on the IPL's advertising landscape, potentially influencing advertising rates and access for brands.

According to him, consolidation within the media and entertainment industry could lead to changes in advertising pricing models and access to IPL broadcasting rights.

“There may be concerns about reduced competition in the advertising space, potentially limiting options for brands and affecting negotiation leverage regarding advertising rates and placement. However, the merger could also present opportunities for enhanced synergy between Disney's extensive content portfolio and Reliance's media networks, leading to innovative advertising strategies and broader reach for brands willing to collaborate within this consolidated ecosystem,” Kumar adds.