In 2021, Viacom18, a media conglomerate jointly owned by billionaire Mukesh Ambani and Paramount Global, spent an estimated $50 million to secure the digital rights to stream the FIFA World Cup in India on Ambani’s video-streaming service, JioCinema. But, on November 20, as the tournament’s first match started, the JioCinema app stumbled. The stream lagged and buffered, frustrating fans. Within hours, #JioCinema began trending on Twitter, with thousands of users tweeting about the platform’s choppy stream.
JioCinema is just one of over a dozen platforms around the world exploring and investing in streaming live sports. In Indonesia, local streamer Vidio outpaced Netflix in subscription growth in the second quarter of this year due, in part, to the platform acquiring streaming rights for the English Premier League. In Latin America, the relative newcomer Vix+, owned by television network TelevisaUnivision, has secured streaming rights in Mexico to football events like the 2022 FIFA World Cup, as part of a bid to pull subscribers from Disney+ and Netflix. In Japan, live TV service Abema broke its audience records this month thanks to its licensing rights for the FIFA World Cup.
Four analysts who spoke to Rest of World say that live sports represent an important battlefield in the next leg of the streaming wars.
“The fact that sports is unscripted drama, the fact that [a sports fan] is a totally loyal consumer rather than a ‘three strikes and you’re out’ consumer [make it] very unique to the genre,” Unmish Parthasarathi, the founder and executive director of Picture Board Partners, a consultancy for streaming companies across Asia-Pacific markets, told Rest of World. “The return on investment on sport [licensing] has been debated for the last 30 years by the industry [but] in the end, prices have gone up, right? Simply because of sport’s ability to appeal to people.”
In 2022, Netflix, Paramount+, and Hulu experienced significant declines in subscribers at some point. Though Disney+ gained 12.1 million subscribers during the third quarter of 2022, the company’s financial losses more than doubled compared to the same period last year.
Experts believe expanding content offerings, including pursuing live sports, is a way to find new customers.
“[Sports streaming] is entirely a subscription play,” Ashish Pherwani, India leader for media and entertainment at EY, told Rest of World, explaining the rationale behind the race to win digital sports streaming rights. “What sports does is it makes people pay. A sports fan will pay to watch [their favorite sport].”
Since early 2022, Netflix has pursued new revenue streams such as introducing ad-supported subscriptions and ways to cut its losses through a global crackdown on password sharing. “I’m not saying we never would do sports, but we would have to see a path to growing a big revenue stream and a big profit stream with it,” Netflix co-CEO Ted Sarandos had said during an earnings call in April.
In June, Insider reported that Netflix had been in talks “for months” to acquire the media rights to stream the Formula One racing circuit. (Ultimately, Disney’s ESPN won the rights.)
That bid followed reported attempts by Netflix to secure rights to international tennis competitions in Europe and the World Surf League. None of the bids ultimately moved forward, but it was a notable change in the company’s posturing toward live sports. Netflix did not respond to a request for comment for this story.
While Netflix has been slow to take on live sports, regional streaming services in Indonesia, Japan, and India have been moving in that direction.
The Jakarta-based Vidio, for instance, is the fastest-growing streaming service in Indonesia, with over 60 million monthly users. In an interview with Rest of World in October, Vidio’s CEO, Sutanto Hartono, credited sports content as a key to its strategy, and a key differentiator from Netflix and Disney+ offerings in the country. In 2018, Vidio was the first to offer streams of the Asian Games. Since then, the company has invested heavily in football content, with exclusive streaming rights to both the 2022 FIFA World Cup and the English Premier League.
In March, Abema, a TV-streaming service owned by the Japanese startup CyberAgent, announced it had secured digital streaming rights for the FIFA World Cup in Japan, alongside established TV broadcasters. Acquiring the rights was a coup for the former blogging company as it grew its streaming arm. In July, the company doubled down on the strategy by securing a longer-term investment in the rights to stream Premier League games.
Abema’s acquisition appears to be an unprecedented success. During the Japan and Croatia knockout match earlier this month, 23 million viewers tuned into the service — a record for the company. That figure amounts to more than 15% of Japan’s national population.
But, like JioCinema, Abema was crippled with problems supporting these many users. Near half-time, the company made a call to restrict access, kicking many new viewers off to keep the stream’s integrity intact. The decision drew derision from users online.
Streaming global events to massive audiences can exacerbate technical challenges, introducing capacity issues at a scale and frequency that is less common for other content.
“Netflix hasn’t got everybody at the same time logging on to the Harry and Meghan documentary,” said Parthasarathi. “Whereas if it’s the Super Bowl, if it’s the World Cup final, it’s [at] the same time around the world. So that concurrency then brings latency. Sport as a genre is very merciless.” To Abema’s credit, Parthasarathi noted that Japan was never predicted to enter the knockout rounds.
In June, Ambani’s Viacom18, which owns JioCinema, won the rights to stream the next five years of the 2023 Indian Premier League (IPL), the third most valuable sports league after the National Football League (NFL). (Disney Star walked away with the TV broadcast rights). Like many global sporting events, the IPL — which saw 600 million viewers worldwide in 2021 — is a huge draw for advertisers.
“Sport as a genre is very merciless.”
“Nowhere else are you able to get such a large audience in such a short period of time,” Pherwani of EY said, adding that an advertising spot during the IPL costs nearly $20,000. By comparison, an ad spot on the second most viewed Indian show, the Hindi adaptation of Who Wants to Be a Millionaire? costs $5,000. “That’s how important the IPL is … Because nowhere else are you able to get such a large audience in such a short period of time,” he added.
Services expanding into live sports, and counting on ad revenue, will need to build out their ad placement infrastructure to fully convert these opportunities. “Jio, as a new entrant in this field, has a lot of catching up to do,” Kavita Shenoy, founder of ad-tech platform Voiro, told Rest of World. Shenoy has worked with the Hotstar team to book and serve ads to millions of users for live sporting events, including the IPL. “Over the last few years, advertisers have grown accustomed to a certain standard of ad products, and this is something that Jio will have to replicate in a very short time,” Shenoy added.
JioCinema did not respond to a request for comment.
Ambani’s Viacom18 play is seen by some market watchers as an attempt to use live sports rights as a loss leader to accelerate the adoption of his streaming service. During IPL bidding, for example, Jio put more than $2.5 billion on the table to win against giants like Amazon and the Sony Group.
Jio will need to be incredibly efficient and data-driven to make a return on that investment, Pherwani of EY said, adding that subscription and advertising aren’t the only monetization options for the platform. “There’s also transactions, including data plans which can bundle sports content and make a huge difference to telcos,” he said.
Jio is the largest telecommunications operator in India, with 400 million customers. Pherwani likened Ambani’s live sports strategy to that of Amazon, where Bezos bundled Prime Video with e-commerce, each benefiting the other.
“The question is less ‘Can I have a return on [investment]?’ The question really is, ‘Can I let my opposition have it?,’” said Parthasarathi. “It’s all about opportunity cost rather than cost. It is a zero-sum game. If you don’t have it, somebody else [will] have it. And if somebody else has it, they may end up three years later having 100 million users and that window of opportunity is gone.”
