How do broadcasters make money from IPL?


IPL 2023 Winner

Broadcasters make substantial money from the Indian Premier League (IPL) through a combination of media rights, advertising, and subscription-based models. The IPL’s huge fan base, global reach, and the high viewership it generates make it a very attractive property for broadcasters. Let’s break down how broadcasters profit from the IPL:

1. Media Rights Deals

  • The most significant source of revenue for broadcasters comes from media rights — the rights to telecast IPL matches both on television and digital platforms (such as streaming services).

  • The media rights deal covers a period (usually 5 years), and broadcasters bid for these rights in a competitive auction.

Key Deals:

  • Star India (2018-2022): In 2017, Star India acquired the IPL media rights for ₹16,347 crore ($2.55 billion approx.) for the period from 2018 to 2022. This deal included broadcasting rights for TV and digital platforms (Hotstar).

    • The huge price paid by Star India reflected the immense popularity of the IPL and its viewership, especially on digital platforms, which had seen a surge due to the growth of streaming services in India.

  • Viacom18 (2023-2027): In 2022, Viacom18 secured the IPL media rights for the 2023-2027 period for ₹23,758 crore ($3.1 billion approx.).

    • This deal includes TV and digital broadcasting and represents an even higher valuation due to the IPL’s growing popularity and digital consumption.

    • This deal also includes global rights, ensuring that broadcasters around the world can sell IPL content in their respective regions, increasing revenue.

How Media Rights Generate Revenue for Broadcasters:

  • Licensing Content: Once a broadcaster acquires media rights, they license the content (matches, highlights, etc.) to other regional broadcasters or streaming platforms globally for a share of the revenue.

  • Advertising Revenue: Broadcasters can sell advertising space during the IPL broadcasts, generating massive income due to the high viewership and extensive exposure brands get during matches.

2. Advertising Revenue

Advertising is a key revenue stream for broadcasters during IPL seasons. The IPL attracts millions of viewers, both on TV and through digital streaming, which makes it a prime platform for advertisers.

Types of Advertising:

  • Television Commercials (TVCs): During live matches, broadcasters sell advertising slots to companies. These ads are aired before the match, during strategic breaks (like the Strategic Timeout, innings breaks, and end of overs).

  • In-Game Advertising: In addition to traditional ads, broadcasters also feature in-game advertising, such as virtual ads on the field or around the boundaries.

  • Sponsor Placements: Broadcasts often include branded content such as special sponsorship for specific segments (like the "Time Out" segment, "Player of the Match" awards, or "Purple Cap" or "Orange Cap").

Why Advertising is Lucrative:

  • Massive Viewership: IPL has an extensive viewership base in India and overseas. With matches broadcast across multiple time zones and countries, broadcasters can charge premium rates for ad slots during IPL broadcasts.

  • High Engagement: The IPL has a high level of viewer engagement, especially on social media and digital platforms, increasing the effectiveness of advertising and enabling broadcasters to command a premium for ad slots.

Ad Revenue Example:

  • During an IPL season, broadcasters can charge anywhere from ₹10 lakh to ₹14 lakh for a 10-second ad spot during prime match times. For highly anticipated matches, the cost can go even higher. This results in broadcasters making significant ad revenue.

3. Subscription Revenue (Digital and OTT Platforms)

With the rise of streaming and Over-The-Top (OTT) platforms, broadcasters now also generate revenue through subscriptions to their platforms.

OTT and Digital Subscriptions:

  • Platforms like Hotstar (now part of Disney+ Hotstar) and Viacom18’s JioCinema are major players in streaming IPL matches.

  • Subscriptions: These platforms charge monthly or yearly subscription fees to users who want to access IPL content live and on-demand. The subscription fees provide broadcasters with a steady stream of revenue.

    • For example, a large portion of Hotstar’s subscription revenue came from IPL matches. Hotstar saw significant growth in its subscriber base due to its exclusive IPL streaming rights.

Ad-Supported Streaming Models:

  • In addition to subscriptions, broadcasters also include ads in the digital broadcast. Free-tier users can watch the IPL content with ads, while premium subscribers enjoy an ad-free experience.

4. Global Broadcasting

  • Selling Broadcasting Rights Internationally: One of the key ways broadcasters make money is by selling IPL broadcasting rights internationally.

  • International Rights: Broadcasters in other countries (like the US, UK, Australia, and the Middle East) purchase the rights to air IPL matches in their respective regions. This helps broadcasters monetize IPL content globally.

    • For example, ESPN holds the rights to broadcast the IPL in the Caribbean, while Willow TV broadcasts IPL in the USA.

Global Advertisers:

  • International advertisers are also keen to advertise during the IPL broadcasts in various regions, which adds another layer of revenue for broadcasters.

5. Sponsorships and Brand Collaborations

Broadcasters can also secure sponsorship deals and partnerships with companies that want to be associated with IPL broadcasts.

  • For instance, broadcasters often have a broadcast sponsorship where a company sponsors a segment of the broadcast, such as "Match of the Day", or specific segments like the "Power Play" or "Super Sixes".

  • Broadcasters might also collaborate with brands for co-branded promotions during the tournament to further increase revenue.

6. Value Added Services and Products

Broadcasters can also generate revenue through value-added services such as exclusive content, behind-the-scenes footage, or interactive experiences for subscribers.

  • Premium Content: Broadcasters can charge extra for premium content like player interviews, exclusive match highlights, fantasy cricket features, or interactive live match features.

Summary:

To sum it up, broadcasters make money from the IPL through:

  • Media rights deals (television and digital streaming)

  • Advertising revenue (TV commercials, in-game ads, sponsored segments)

  • Subscription fees for digital streaming platforms

  • Selling international broadcasting rights and engaging global advertisers

  • Sponsorships and brand partnerships related to broadcasting

  • Value-added services like exclusive content or interactive features

The IPL’s global popularity and massive fanbase make it an extremely lucrative property for broadcasters, who can monetize the league in multiple ways across traditional and digital platforms. This multi-channel revenue generation model ensures that IPL broadcasts are incredibly profitable for all parties involved.

Let me know if you want to explore more about a particular aspect of IPL’s broadcasting revenue!