Jio Cinema is currently trying to dominate the sports streaming market in India. From past few years, it has tried acquiring the rights for every major tournament that has a watch share in India, to expand its user numbers. The chief competition of Jio in streaming world is Disney+ Hotstar, and the former is doing everything to eliminate the competition.
The platform first got the rights to stream major FIFA tournaments including the world cup. It also acquired the rights to stream IPL- the most watched sports league in India, which resulted with Hotstar from a long time. Then Olympics, Indian Domestic Cricket, T20 cricket, all these were acquired by the platform to stream. As of now, Jio Cinema holds the streaming rights for almost all the major T20 cricket leagues in the world.
But this acquisition is turning out to become problematic for the platform. It has acquired an innumerable amount of streaming rights of sports league. Many of these sports don’t even have a good audience in India. This bulk acquisition will lead to substantial losses for the company. The revenue earned through subscription will not be able to meet these expenses at all. And even with growth in subscriptions, the company will incur losses.
Statistically, even if the company manages an annual growth rate of 10-15% in subscriptions, and considering that the new subscribers will stay; the company will still have losses of about $700-800 million per year for the next three years. The company will forcibly have to increase the subscription charges which currently won’t even make the situation even, let alone be turning profit.
Surely the financial team of the company is aware of these and is working on the same. The firm will not think of increasing subscription rates as it will make the customers unhappy, reducing their retention to the platform. This will lead the platform to release some of the less popular tournaments which people don’t want to watch, or watch very rarely. It will induce less load on the expenses of the firm and hence will reduce the losses. If done wisely, this strategy can eliminate the losses without significantly impacting the subscriber count.
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