JioCinema is making major headwinds in the on-demand video streaming market in India

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Being one of the largest consumer markets worldwide, many global players including on-demand streaming providers such as Netflix, Amazon Prime, and Disney+ have huge growth expectations from the Indian market. However, the aggressive play adopted by JioCinema is denting the growth prospects for many of these players.

In 2022, JioCinema won the five-year digital rights of streaming the Indian Premier League (IPL), one of the biggest sporting events in India and worldwide. The streaming platform made a bid of approximately INR 237.5 billion to gain digital rights from Disney+ Hotstar, which hosted the event last year.

• Being a new player in the segment, JioCinema adopted an aggressive approach to mark its foray into the Indian market. Viacom, which owns JioCinema, streamed the entire season of IPL for free to all of its users. On the opening weekend of the IPL, JioCinema experienced more than 50 million downloads.
• At its peak, 32 million concurrent viewers live-streamed the event, which happened during the final match of the season. This is the highest number of concurrent viewers recorded by a streaming platform. This shows that the strategy of offering free content to cricket-crazy nation worked in favor of JioCinema.

In addition to free streaming, JioCinema also focused on offering an immersive streaming experience to its viewers. The release of a 360-degree viewing feature, coupled with various language feed options, meant that JioCinema was leaving no stone unturned to drive its popularity in the fast-growing streaming video-on-demand industry.

With millions of concurrent viewers logging in every day, JioCinema also attracted several sponsorship deals for the cricketing event. PhonePe, Dream11, Rapido, Spotify, and Amazon, were among the many that sponsored the IPL. Furthermore, the streaming platform also generated millions of dollars in ad revenue in the recently concluded IPL 2023. The platform had more than 800 advertisers reaching customers during the cricketing festival. This is the highest for any streaming platform across events in India. PayNXT360 expects JioCinema’s ad revenue to be upwards of what Disney+ Hotstar recorded in 2022.

After boosting the popularity of JioCinema with a free tier account, the streaming platform is now pushing its premium service with licensed content. JioCinema, for instance, entered into strategic collaborations with Warner Bros, Discovery, and NBCUniversal in an exclusive content deal.

The aggressive stance adopted by Viacom does not stop with these strategic collaborations. The firm, in April 2023, also announced that the streaming platform will release as many as 100 movies and shows over the next two years. The content will be produced with an estimated cost of more than INR 20 billion. With content spanning across different languages and genres, JioCinema is seeking to take the market share away from Disney+ Hotstar, Netflix, SonyLiv, and Zee5 through INR 20 billion investment.

There is no doubt that the entry of JioCinema in the streaming video-on-demand segment will drive the competitive landscape significantly in the Indian market. It has already taken a big market share away from Disney+ Hotstar by gaining the digital rights of IPL. 

• In Q1 2023, Disney+ Hotstar suffered a 2% contraction in its total subscriber base, largely due to JioCinema. The 2% contraction means that the platform lost a total of 4.6 million subscribers. For Disney+ Hotstar, Q1 2023 was the second consecutive quarter, wherein the platform witnessed subscriber loss. Between October 2022 and March 2023, the platform lost a total of 8.4 million subscribers. This number is expected to further grow in the remaining three quarters of 2023.

While JioCinema made big waves with its free offerings, the premium service might not be that well received by viewers. As a result, PayNXT360 does not expect a large scale of paid subscriber base for JioCinema. Although Viacom has priced the premium service offering at INR 999 per year and is competitive with the offerings of other platforms, the uptake is projected to remain subdued.

This is because the Indian audience is value driven and might not pay so much for viewing content offered by HBO and Warner Bros. Moreover, the fact that IPL is finished and the platform does not have much to offer in terms of other sporting events, concurrent viewership is expected to decline significantly in H2 2023.

This might come as a reprieve for other streaming platforms like Netflix, which also ramped up the investment in producing new content in India. In Q1 2023, Netflix already launched a bunch of new titles in the Indian market, including both movies and shows. Going forward, it might also launch an ad-supported tier for tapping the value-driven consumers in India.

Overall, JioCinema is expected to maintain its aggressive approach in the streaming video-on-demand category. PayNXT360 expects the firm to forge more alliances with global content producers. At the same time, it is expected that JioCinema will further stream more sport-related content, as it seeks to tap into the sport-loving consumer demographic of India.

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