How Cricket Helped India's Hotstar Become a Streaming Giant

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Indian cricket team captain Virat Kohli.

The 2019 ICC Cricket World Cup in England will prove to be a ratings bonanza for the Disney-owned company, which has built upon its IPL rights to dominate sports coverage in the world's second-most populous country.

Billions of cricket fans will be glued to their screens today as the 2019 ICC Cricket World Cup begins in England and Wales. As the likes of England, Australia, South Africa and India vie for the trophy on the cricket field, off it there is already one big winner: Indian streaming giant Hotstar. 

Now part of the Walt Disney Co.'s sprawling entertainment empire, Hotstar, which is besting Netflix and Amazon in the fastest-growing streaming market in the world, is expecting record viewership for the World Cup buoyed by a cricket-mad local audience and experience gained from streaming the Indian Premier League. 

When Disney acquired a majority of 20th Century Fox's assets in a $71.3 billion deal, Fox's Star network, which runs streaming service Hotstar, was considered a "jewel" by analysts considering how it is a dominant player in entertainment and sport, the latter primarily built upon acquiring the rights to the IPL.

In 2018, Star India grabbed global broadcasting and digital rights for the wildly popular IPL for $2.55 billion, a bid which was considered a record for the sport while beating rival Sony Entertainment Network, which had held the rights for the previous 10 years since the IPL was launched. At the time, rival bidders included the likes of Facebook, which reportedly bid $600 million, underlining the importance and potential of India's sports streaming market.

Even more so than the NFL in the U.S. or the English Premier League, the IPL has become a cultural phenomenon in India, popular not just because of its brand of high octane and flashy cricket, but also its fusion with India's other major obsession, Bollywood. Film stars routinely appear at matches and strive to be associated with the IPL and some such as Shah Rukh Khan (Kolkata Knight Riders) and Preity Zinta (King's XI Punjab) are team owners.

On top of the IPL rights, Hotstar and Star India have rounded out their cricket offerings with a $940 million deal with the sports' governing body, the Board of Control of Cricket in India (BCCI), for worldwide TV and digital rights for all international cricket matches to be played in India through 2023. In a separate deal, Star India also acquired rights for events organized by the ICC, from 2015 to 2023, which include two cricket World Cups and two World Twenty20 events.

So how are Star India and Hotstar's investments paying off when it comes to viewership?

Speaking at the MoffettNathanson Summit in New York on May 15, Disney chief Bob Iger cited Hotstar's viewership figures for this season's final IPL match, which took place May 12. “They had 18.6 million viewers watching that match at one time, which I am told is a record," Iger said, adding, "So we have a presence in television and direct to consumer business in India, which will soon be the most populous country in the world that we never had before."

The final match between the Mumbai Indians and the Chennai Super Kings registered a massive jump over the 2018 season finals, which reached 10.3 million viewers on Hotstar.

Soaring streaming viewership for the IPL has been boosted by more affordable mobile data plans being offered by newly launched telecom giant Reliance Jio. In 2018, the streamer said 202 million viewers logged on for the entire IPL season, which in itself was a 55.3 percent jump from 2017. Hotstar's viewership for the 2019 IPL season reached over 300 million.

“Our success in IPL 2019 in terms of viewership and reach is a testament to the platform’s superior standard of live sports streaming," says Hotstar chief product officer Varun Narang. He explains that the streamer "has constantly raised the bar of tech innovation, proving its mettle at handling the immense scale and traffic seamlessly."

When the last cricket World Cup was held in 2015, Hotstar drew 340 million views for all matches. Considering that India's digital market has been on a blistering growth path since then, the streamer can be expected to notch up big numbers for the 2019 tournament, which features teams from 10 countries. 

And it's not just India where Hotstar hopes to reap a cricket-fueled ratings bonanza. The company has the rights to stream the event in the U.S. and Canada as well and has unleashed an aggressive World Cup marketing campaign for North America, offering commentary in five languages (English, Hindi, Telugu, Kannada, Tamil and Bengali), hoping to the reach the large South Asian diaspora in the region, which numbers somewhere up to 7 million potential people. 

In the U.S., Hotstar is piggybacking its existing IPL marketing, including the series US6: The Homecoming, that took six Indian American cricket players back to India to meet their cricket heroes.

Despite its dominance in cricket, Hotstar hasn't had all its own way with sports streaming in India. Sony Television Network's OTT platform SonyLIV has gained a sizable arsenal of properties, which include streaming rights for India’s cricket tours to South Africa, England and Australia. SonyLIV also offers Australian Open tennis, the NBA, MotoGP, UEFA Champions League soccer, WWE and more. 

But on the broadcasting side, Sony runs a joint venture with Disney-owned ESPN which was unveiled in 2015. This marked ESPN's return to India after it ended its 18-year-old joint venture with the Star network in 2013 which runs its Star Sports bouquet of channels.

Following the Fox merger, Disney is essentially the dominant player in sports broadcasting in India, owning Star Sports while being partners in Sony ESPN.

Beyond cricket, Hotstar offers the popular Pro Kabaddi League based on a traditional Indian contact team sport, the English Premier League and German Bundesliga, Formula One racing, and Wimbledon and the U.S. Open tennis.

"Streaming services that offer sports have an advantage because unlike a film or a series, sports has to be live and it becomes a magnet for users and therefore growth. But the challenge is to retain and monetize that customer for the rest of the year," says consultants Deloitte India partner Jehil Thakkar. He also adds that compared with traditional broadcasting, streaming services are a more economical platform for sports considered niche in India, such as golf, tennis and Formula 1 racing.

Hotstar does not give a breakdown of how its user base is divided between its free advertiser supported AVOD and SVOD services, which include two options: an annual $5.2 (365 rupees) package for sports and some entertainment content and the premium all-inclusive $14.4 (999 rupees) annual package. By contrast, Netflix's monthly packages start at $7.2 (500 rupees) per month while Amazon charges $14.4 (999 rupees) annually.

While cricket and other sports have given Hotstar wider mass appeal compared to entertainment-only rivals such as Netflix and Amazon, the streamer is equally aggressive in its entertainment offerings. This is largely due to Hotstar drawing from parent Star India's diversified broadcasting content, which covers multiple languages and genres, in addition to its slate of originals that include local remakes of U.K. shows such as Criminal Justice and The Office. Hotstar's international offerings include HBO shows such as Game of Thrones, Silicon Valley and Westworld as well as movies from Fox and Disney.

When Disney acquired Fox's assets much of the attention was focused on the U.S. film and TV properties, with fans and analysts alike excited by the prospect of the X-Men, The Simpsons and the Kingsmen franchises joining Star Wars, Marvel and Pixar. But Disney management saw real potential with the addition of Hotstar in particular. As Iger pointed out in that May summit: "We also ended up with really interesting business in Asia and Southeast Asia and particularly India with Star and Hotstar. To give you an example, for every four hours of video watched in India today, Hotstar gets one hour of that."

Hotstar's sports and entertainment edge should only get stronger in the future as and when Disney+ is launched in India. “The Disney+ service in India would be managed by the Star and Hotstar team," Iger said without confirming a launch date, only adding that Star and Hotstar "already have the technology, they already have a relationship with consumers and they know the market extremely well."