Reports This Month
- Scouting Report: Creator Enablement and New Commerce
- Scouting Report: Consumer Spotlight: Payments Powering E-Commerce
- Heat Check: Stadium Innovation: The Benefits of Modular Construction
One Big Thing
April felt like a moment for streaming companies, with the biggest news being Netflix’s declining subscriber numbers and Warner Media’s failed CNN+ experiment.
Overall, the sentiment from the street has been somewhat negative as analysts start to see market saturation meaningfully impacting subscriber numbers.
Earlier in April, a Nielsen report found that nearly half of consumers who participated in the report felt overwhelmed by the number of streaming services available. Additionally, a survey of streaming services in the U.K. by industry analysts from Kantar found that in the last three months, 1.5 million households had canceled a streaming service subscription, and 38% of those cancellations were made in an attempt to cut costs.
In essence, the abundance of streaming services is no longer a boon to consumers but a burden.
True product differentiation has yet to materialize but there does seem to be a logical path to customer acquisition. Live sports make a difference, and one market clearly providing value to consumers is the IPL
Since November of 2021, PL media rights have been a hot commodity.
As it currently stands, Disney-owned Star India owns rights to the league. The five-year, $2.6 billion deal expires this summer, and the cost is estimated to potentially triple as bids continue to increase since last year.
One reason: valuations for IPL teams have been exploding. IPL clubs have seen an annualized growth rate of 24% in just over a decade, according to Forbes. That’s more than both the NBA and NFL, which have seen 16% and 10% growth rates, respectively.
Of the 10 teams in the IPL, seven currently tout a $1 billion-plus valuation, with the Mumbai Indians leading the pack at $1.3 billion.
One of the main reasons for the rapid growth in valuations has been the ever-increasing viewership numbers in India. Up to match 35 last year (delayed due to COVID), the IPL brought in its highest viewership in three years — 380 million viewers (roughly 10 million per match). For context, an NFL game draws an average 17.1 million viewers.
Disney is one of the six main competitors looking to acquire the rights. While it’s difficult to extrapolate, the company’s most recent financials indicate that 35% of Disney+ subscribers come from India. Of these users, a large portion are likely subscribing for access to the IPL.
Other bidders include Amazon, Dream 11, Reliance Industries, Sony, and Zee Entertainment — Sony purchased a 53% stake in Zee last year. Other bidders may still decide to join, and those listed may not end up bidding at all.
Live sports have the highest impact on subscriptions and engagement out of any form of content. According to George Cheeks, head of the CBS Entertainment Group, Paramount+ relies heavily on its live sports rights (mostly European soccer) when it comes to growth.
“[Sports] is television’s most valuable property by far, attracting massive audiences, and major advertisers, and it will be fundamental to the growth of Paramount+… It drives more subscriptions than any other program and significant engagement, too.”George Cheeks, CBS Entertainment
While Netflix has stated that it will not be going after live sports rights, it’s hard to imagine that the company will be able to stave off the sports strategy for the long term.