How are Jio supposed to make $3 billion on the IPL?
And, what happens to cricket if they miss that target?
Mukesh Ambani paid more than $3 billion for the rights to show the IPL on the Jio Cinema app for half a decade.
That’s such a ridiculous number.
It’s 175% of what Hotstar paid for both the streaming and TV broadcasting rights in 2017 - a number that even the fantastically rich Disney corporation seemed to regret by the end of the last media rights cycle in 2022.
Disney’s problem was that they could never monetise the Indian audience. Even at the height of their success - they had 61 million paying subscribers in September 2022 - they couldn’t break even.
Jio has opted for a different strategy. Give it away for free. All of it. Don’t aim for 61 million viewers, aim for 650 million viewers. Make it all back on ad sales.
So, I figured I’d check it out. I’d sit through the IPL stream on Jio Cinema, and I’d pay attention to everything but the cricket. I took down the details of 2,692 ads from 62 different brands who advertised during the 11 matches that took place between April 3 and April 12.
And, I think Jio’s strategy is backfiring. They have too many viewers.
Why would more viewers be a problem?
Traditionally, putting an ad in a newspaper or a TV broadcast comes with a fixed cost. Depending on how large and/or how rich the audience of a particular outlet is, that cost may go up or down, but it’s a fixed cost for a fixed return.
The Internet works differently. People sell ads based on an ever-changing number of views. There are so many people on the Internet simultaneously looking at different things, an individual view doesn’t mean much. Therefore, the standard metric used online is cost per mille (CPM), or the cost of showing your ad to a thousand viewers.
If you put an ad on Meta or Google, an average CPM rate is around ₹9-10 ($0.11-0.12). There are some technical variations, but overall it’s cheap enough to get MSMEs to spend money. Meanwhile, according to ad platform The Media Ant, JioCinema’s CPM is ₹200 ($2.4) for video ads during the IPL matches, with a minimum spend of ₹5 Lakh ($5,980).
It’s higher because (a) they’ve got an incredibly valuable product - not even Meta or Google can guarantee you a hundred million viewers proactively tuning in to the same video feed every evening for two months. And, (b) they need to recoup $3 billion from the IPL media rights purchase. That’s going to be real hard to do at ten bucks a pop.
Jio’s got a few different ad slots, but I decided to look at the ads that run between overs to get a snapshot of what’s going on. Unlike partnerships and sponsorships, any small advertiser can put up a mid-over ad, as many times as they want, and at the exact viewership number they can afford. Three ads between 45M and 50M viewers during every Rajasthan Royals match? Done!
As the graph shows, the average number of ads really starts to tank once you cross 100M viewers - which is a problem because an IPL match on JioCinema usually hits that number at the start of the second innings.
More depressingly for Jio, it’s their Android advertisers that really drop off. Why does that matter? Because Apple only makes up 6.5% of the Indian smartphone market. If you assume that ratio holds for JioCinema users (and every iPhone owner is watching the IPL on JioCinema every night), that’s less than 15 million viewers per match.
That does explain the trend in the graph though. The number of ads shown to Apple devices remains largely steady through the matches because the costs never get out of hand. Even at 15M people, you’re still paying a maximum of ₹30,00,000 ($35,880) per ad at a CPM of ₹200.
However, for Android advertisers, that number can jump between a maximum of ₹10,00,000 ($11,960) at 5M people to ₹4,00,00,000 ($478,404)1 at 200M people - all within a four-hour gap!
If you look at which teams draw the most views and the most ads, it’s not surprising that three most commercial teams - RCB, MI & CSK - do well. What’s more interesting is that most of the other teams don’t really drive ads to the same degree despite having pretty high average views per match.
The outlier? Lucknow, who average fewer than 138M views per match at their peak, but average over 192 paid ads per game. They’re so (relatively) unpopular that advertisers can afford to buy more ads!
Let’s do a quick comparison. On average, Punjab’s matches have peaked at 182.5M views, while Lucknow’s matches have averaged a peak of 137.5M views.
At the ₹200 CPM rate, it costs you ₹36.5 crore to advertise during the climax of a Punjab match, and only ₹27.5 crore during the Lucknow match. If you have a ₹110 crore budget2, that’s 3 ads in the Punjab match versus 4 ads in the Lucknow match!
Obviously, no one is paying such insanely high numbers for ads because various factors like ad targetting and discounts for mass ad buys will bring these numbers down pretty drastically. But, what’s clear is that the math gets really tough to swallow beyond 100M viewers - especially if you’re targetting Android users.
But, do you want to know the biggest obvious indicator that JioCinema is not selling as many ads as they want to?
It’s that the number of internal ads - promoting other JioCinema shows, promoting future IPL matches, promoting emojis that you can use in the JioCinema chat - goes up pretty quickly as the external paid ads start drying up.
Are there enough different advertisers on JioCinema?
I think JioCinema understands the issue it has with spiralling ad costs, and their solution is to increase the quantity of advertisers on their platform, rather than trying to convince the same clients to buy more ads.
They boasted that they had brought on 195 advertisers in 2023, with 149 solely focussed on mobile advertising. Impressively, 94 of those advertisers promoted an ad on at least 10 days of the season - at least according to this report - although their number of ads was not mentioned.
The reason I chose 10 days as the cut off in the comparison is because that is one-fifth of the entire IPL season - and the same number of days that I happened to track this ad data! So, it gives us a basic sample size to play with, and to see if that number is going up or down.
They’re not doing too badly. In this random 10-day sample in the middle of the tournament, there were at least 61 different brands putting up 1,961 paid ads during 11 matches. This doesn’t include their partners and sponsors, nor does it include ads before or after the match.
If you take into account that more advertisers will join the bandwagon as the season goes along, JioCinema is doing a pretty good job of overhauling last year’s total.
However, Jio has bigger ambitions.
A recent press release mentioned that they want to target MSMEs who currently advertise with Meta & Google, and their goal for this IPL is to on-board 4,000 new advertisers via special daily packages with CPM costs as low as ₹25.
Unfortunately for Jio, their numbers from the last 10 days don’t look so good if you look at it from a quantity-based, MSME-first perspective.
As the graph shows, seven advertisers - of whom three are foreign and one is a government-backed entity - bought up more than half of the ad slots.
Even worse is that advertisers who are either owned or funded by Reliance3 bought one in every 25 ads - which would make them the eighth biggest advertiser during these 10 days.
Furthermore, the Government of India defines Medium Sized Enterprises to be companies with annual turnovers of less than ₹250 crore ($29.9M). Even providing some leeway for companies whose turnovers are unclear, there were only 3 companies who bought 4 ads - or 0.2% of all paid ads - that qualified as MSMEs under that criteria.
Finally, there was a dependence on foreign money. During the period I analysed, 15 of 52 total parent companies4 that bought ads have their home base outside India, and were responsible for buying up 32% of all ads.
What’s next for Jio?
I think what’s obvious is that Jio is pretty early in their cycle of development for the IPL, and they have ambitious goals (even if they have no clear path towards it).
In terms of what Jio can do better, the obvious answer is improving their ad platform. At the moment, too much is still run through third party platforms and vendors. They’re acting like a TV broadcaster that also happens to stream IPL matches rather than a digital-first entity.
They say they want to challenge Meta & Google, but that means three drastic (and maybe unachievable) improvements are needed; (1) ad-buying and campaign data should be as easy to use as it is on those platforms, (2) ad targetting needs to be hyper-local and effective, and (3) audience analytics needs to be much better. At the moment, Jio is chasing views without an understanding of who wants to sell ads to those audiences.
But, beyond all that, Jio has a fundamental problem. Meta & Google make their money from performance marketing - selling you ads that you want to see at this exact moment. You want shoes? Oh, look, an Instagram ad about a new sneaker company.
But, the IPL is not a good performance marketing platform. No one is clicking off the match to apply for a PNB loan, nor are they missing overs to check out Provident Botanico’s new apartments.
What the IPL is good at is branding. I’m never going to forget that the strategic timeouts were sponsored by CEAT. I’m vehemently against sports gambling, but even I chuckle along to Pandya torturing Ashwin with bad rap in a Dream11 ad. Plus, I will never remember the specific product they’re pushing, but Parle’s truly absurdist ad campaign definitely has my attention.
How do you get a value-for-money market to pay for branding (en masse), when there are cheap performance marketing alternatives in Meta & Google? I honestly don’t know.
What if JioCinema don’t break even by 2027?
I don't think losing money on this deal would be a problem. Mukesh Ambani has ungodly amounts of money, and is willing to lose big for years if he sees light at the end of the tunnel.
The bigger problem in my eyes lies with what happens to the BCCI when the media rights cycle is up for renewal in 2026. Ever since that record-breaking ₹48,380 crore (~$6.2B) IPL media rights sale in 2022, the Indian broadcasting sector has fallen apart.
Zee & Sony wanted to get together to fight the big boys - but have instead ended up fighting each other. Disney thought they could save money by not overextending themselves during the IPL rights auction - and instead they’ve found they can’t survive without the IPL, and are selling out to JioCinema.
What happens if 2026 rolls around, JioCinema have not made back their money, and there are no other broadcasters who can afford to pay for the IPL rights? We’ve already seen the BCCI barely maintain their number with the media rights sales for Team India last August. What happens when they’re backed into a corner against a single broadcaster with all the leverage in the world?
And before you laugh at the BCCI’s comeuppance, think about the repercussions beyond the administration. The majority of IPL teams’ revenue comes from the media rights distribution. What happens if the teams agree to increase budgets - the average player is currently underpaid - and then they suddenly lose their main source of funding?
And, it goes beyond the IPL. With their decision to award India 38.5% of its annual income, the ICC has put all its eggs in a single basket; either we figure out how to better monetise Indian audiences, or the financial health of the global sport is at stake. It doesn’t help that Pakistan, a country that could substantially diversify the ICC’s coffers, has been in unofficial exile for years.
Obviously, this is a worst case scenario. But the IPL is not as old and as permanent as it seems. Far older and more established global sports have seen themselves falter in the new digital environment - golf and tennis are selling out to Saudi Arabia, the F1 is highly dependent on a Netflix show to maintain interest, and the European footballing elite is trying to stop money flowing to the grassroots game.
Cricket’s one saving grace? Mukesh Ambani has so many conflicts of interest in this scenario - from Reliance’s external dealings with the BCCI secretary’s political party to his wife’s management of the biggest team in the IPL - that he probably won’t let the league or the BCCI fail.
But, the next few years are going to make or break cricket in the digital age. No wonder everyone wants to get the Americans involved. They buy what the ads tell them to buy.
Obviously, asking someone to pay INR 4 crores for a single ad spot is insane. They probably have special deals for large buyers, and discounts towards the higher end of the spectrum. Plus, this doesn’t take into account any particular ad targetting, how many people are watching a particular language feed, or the length of a particular ad. But, it’s a good example of how drastically costs can increase towards the back end of these matches - and why you see so few paid ads at the ends of matches.
Again - I doubt anyone is actually paying those numbers. But it’s a good illustration of how you can get an extra ad for the same price during the Lucknow game versus the Punjab game!
Think Vimal Pan Masala, NMACC and - ironically for this article - ads promoting Disney Hotstar, which Reliance is in the process of acquiring.
To understand the difference between a parent company and a brand, think PepsiCo. and Gatorade.
Editor’s Note
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