Business Headlines : How Mukesh Ambani benefits by streaming IPL for free?

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If you are a fan of IPL, then it's fair to assume that you would have thanked Mukesh Ambani for broadcasting it free of charge on the Jio Cinema App. I mean, sure, Disney star has won the TV rights for IPL again, but a lot of us are switching over to streaming these days. Viacom 18 won the digital rights for IPL for the next 5 years. And Viacom 18, as we all know, is owned by Mukesh Ambani's Reliance Industries. They paid a massive 23,575 crores for the streaming rights, and by some miracle, decided to allow us all to watch it for free.
Mr Mukesh Ambani and his family are known to be big fans of cricket and even own the Mumbai Indians franchise. But if you ever thought they are doing it for the love of the game, then you need to stay tuned for this video till the very end. Because I am going to explain just how a shrewd businessman like Mr Ambani plans to recover every rupee and then some by allowing us to watch his favourite game for free. And guys, if you enjoy such videos, please be sure to hit that like and subscribe button for more such financial content.
Prior to this year, if you wanted to watch IPL, you had to buy a subscription from Disney Hotstar for 299 rupees a month or 1499 rupees for the whole year. For this price, you could happily watch IPL as well as other sports, movies, web series, documentaries and more on Disney Hotstar. Which like Netflix, Amazon Prime, Hulu and the likes are OTT platforms. Disney Hotstar is by the way the most popular one in India and since 2014, it was trying to create a sports broadcast monopoly in India.
OTT platforms are the new buzzword in town and because of improving internet connectivity and smart TVs have become very convenient to use. First, cable TV became unpopular and now even satellite TVs such as Tata Sky, Dish TV and Airtel DTH are slowly going out of fashion. It's all OTT these days, especially with a younger audience. And Reliance doesn't want to be left behind in this game. So what did they do? Simple, they took the biggest sporting event in the world, the Football World Cup and streamed it for free a few months ago. And now, they're taking the biggest sporting event in India and doing the same. It's just that there's a price tag of 23,500 odd crores attached to it. So how exactly do they intend to recover this hefty sum?
A lot of you must be thinking that Reliance will let everyone watch this year's IPL for free and get everyone addicted to its viewing experience with some fancy features like 4k, etc. and then begin charging and earning from subscription revenue in later seasons.
After all, that was their business model when they first released Jio. First internet was free and you only had to purchase the hardware such as the wifi router, etc. Slowly but surely, after they got a large enough user base, they began charging for internet as well.
But it's different this time around because subscription revenue will be too low considering the scale of Reliance Jio would like to operate at. Advertising revenue too won't be enough to cover the entire amount paid for streaming rights. And I'll get to that in a bit. So if the numbers of direct monetization don't add up, and by direct monetization, I mean either earning through money paid for subscriptions or advertisements, then it's only logical that Team Reliance is planning an indirect approach. Because after all, Mukesh Ambani has been a master at introducing a thing that is of relevance to the masses and later cashing in on it. Reliance basically comes, elevates your standards for free, then sells you the survival pill for it. Like by giving you the sim and internet for free, they made everyone understand how beautiful the internet is and how important it is for your future. If they hadn't made it free, a large part of India wouldn't have thought about paying for 4G.
So you could say that all they do is show you the use case, make your life empty without it, then charge for it.
So, now that we know the bait, free streaming of IPL matches on Jio Cinema App, let's try to understand the trap. Data. Yes, we are going to be consuming a whole lot of data to watch the matches. And Reliance is hoping that we buy more data from them. Let's discuss.
Data, they say, is the new oil. And nowhere is this phrase more relevant than Reliance Industries. Because Reliance is literally shifting its focus from legacy petrochemicals and oil business to new age ones such as digital. And data plays a huge role in it.