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Reliance-Disney ( DIS ) entity shifts focus on revenue as IPL

starts

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Ambani-led venture lures advertisers, compares itself to

YouTube

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Reliance stops free IPL streaming in strategy shift

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Brain mapping results deployed to lure advertisers

By Munsif Vengattil, Aditya Kalra and Sai Ishwarbharath B

BENGALURU, Feb 25 (Reuters) - After striking an

$8.5-billion media merger with Walt Disney ( DIS ), Indian billionaire

Mukesh Ambani is targeting small businesses and promoting

unconventional neuroscience studies to boost its revenues from

the IPL, the world's most valuable cricket league.

The pricey broadcast rights for the Indian Premier League

(IPL) and other cricketing events which cost Disney ( DIS ) and Reliance

nearly $10 billion in recent years, are set to weigh big on the

merged group, which is India's biggest entertainment giant.

Battling competitors Netflix ( NFLX ) and Amazon ( AMZN ) in the $28-billion

market, the Reliance-owned venture is holding a month of

closed-door seminars in seven Indian cities to woo small

companies to become IPL advertisers, offering ad packages worth

$17,000.

"Ads are integral to IPL coverage," the company said in one

document that set its streaming service a target of reaching 40

million smart TVs and 420 million mobile devices during the IPL,

set to run for 60 days from March 22.

The document shows Reliance is privately pitching

advertising agencies with "brain mapping" research that it says

analysed the brain cells, or neurons, of participants to show

its streaming ads have a higher engagement rate than Google.

Five media executives and Reliance sources, and two company

pitch decks, revealed its focus on adding small advertisers as

it beefs up digital ad inventory to increase streaming revenues,

in strategies Reuters is the first to reveal.

"You have to make money," said one company executive

familiar with the thinking behind the effort.

All the sources spoke on condition of anonymity as the

strategies are confidential.

Reliance's Star India, which runs its broadcast and

streaming business, and Disney ( DIS ) did not respond to

requests for comment.

Reliance also plans to monetise tiny scorecard space on

mobile screens, after having decided this month to end free

streaming of IPL on its JioHotstar app, offered since 2023, in

the first major sign it is battling revenue pressures.

IPL launched in 2008, becoming an instant success among the

subcontinent's cricket-crazy fans. In November, 10 teams, one of

them owned by the Ambanis, fought a fierce $74-million bidding

war for cricketers to play the 74 matches of this year's IPL.

Digital is the new media battleground in India, where TV

channel pricing is strictly regulated and geolocation of ads is

not possible on the traditional broadcast medium.

Amid fierce rivalry with Google and Meta, which dominate

India's digital advertising space, Reliance plans to exploit

user data to offer ads targeted on the basis of such aspects as

a viewers' ages, incomes and locations, while upping ad rates.

Many small businesses and company executives attended

Reliance's February seminar in the southern tech hub of

Bengaluru to be pitched one-on-one with IPL ads described as

being more affordable than ever.

A Reliance ad rates booklet showed packages started at

$17,000, but wellness startup owner Anita Devraj, who attended

the seminar, said, "I find it cheaper to advertise on Instagram

and YouTube."

COSTLY RIGHTS INVESTMENT

Before their merger, Reliance and Disney ( DIS ) spent

roughly $3 billion each to bag IPL streaming and TV rights for

the period from 2023 to 2027, and billions more on ICC cricket

and other leagues.

But the heavy investment caused pain, with Disney India

later describing the ICC rights as "onerous" and causing an

estimated loss of $1.42 billion.

However, Reliance sees the IPL as key to luring advertisers,

given the sport's popularity, and consumers who may stay on to

subscribe to other content, such as HBO movies or Bollywood

hits, said the first company source.

To overcome the Indian antitrust body's concerns with

cricket rights and win clearance of the merger, the companies

committed not to raise ad rates to an "unreasonable level".

This year, Reliance has raised IPL streaming ad rates by up

to 25%, according to a Reliance executive and documents drafted

by one of its Indian media agencies, the Media Ant.

Packages at lower rates are offered by media agencies which

buy ads in bulk from Reliance to sell to clients. While Media

Ant's website offers IPL packages starting at 500,000 rupees

($5,800), YouTube ad packs start at just 10,000 rupees ($115).

Streaming is becoming mainstream but competition is stiff,

Uday Shankar, the vice-chairperson of the Reliance entity, told

McKinsey in an October interview.

"You're competing with global players: Google and Meta," he

said. "Most of digital advertising revenue goes to these two."

Reliance's growing focus on challenging U.S. streaming tech

is evidenced by pitch deck pictures of people wearing headsets

and heart rate monitors to track neurons for a "brain-mapping

study" comparing how engaging its IPL ads were against rivals.

It said the results showed the "focus", "engagement" and

"memorability" of the ads were up to four times greater than

Meta's Instagram and Google's YouTube. The two firms did not

reply to requests for comment on the Reliance assertions.

"No platform has more engaged viewers than YouTube,"

Google's own "brain-imaging study", with participants from

Britain and Germany, concluded last year.

However, Reliance cannot hope to beat the reach of YouTube,

with nearly 500 million active users in India, while touting

neurons can only take you so far in the ad market, said Daoud

Jackson, a streaming analyst at Informa TechTarget.

"You aren't going to win an argument in a board meeting next

year by pointing at a brain scan, you'll win that market by

pointing at the profit and loss chart."