21 Sep 2017
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Facebook’s Rs 3,900-cr IPL bid indicative of video ambitions

MUMBAI: Facebook may have lost the auction for streaming Indian Premier League (IPL) matches to Star India, but it goes to show how serious a growth market India is for the social media giant.

Facebook’s bid of Rs 3,900 crore was the highest for the digital-only rights of the IPL for the next five years. Airtel and Reliance Jio, who bid for the India digital rights, bet lower at Rs 3,280 crore and Rs 3,075.72 crore respectively. It was only Star India’s consolidated bid of Rs 16,347.51 crore for TV and digital rights that thwarted Facebook from grabbing the rights.

Facebook’s aggressive bid is indicative of how important the streaming rights have become. The social media giant was willing to pay Rs 780 crore per IPL season, almost what Sony was paying (Rs 820 crore on average) for the television rights in the earlier cycle.

What could be more worrying for television broadcasters is that Facebook could have a video content plan as part of its growth strategy in the US and other parts of the world including India.

The IPL is the first occasion when Facebook has been trying to get its hands on first-tier sports content. It has already been paying for second-tier content like college football games between low-profile teams. But the IPL bid could be the starting point for Facebook to try and own rights to bigger sports properties. Speculation is already rife that Facebook may make a grab for the NFL mobile rights, which are currently with Verizon but expire at the end of this season. Verizon had got the four-year rights for $1 billion.

In India, global OTT companies like Amazon Prime Video and Netflix are writing big cheques to lap up local content. Facebook is not in competition with them, but as part of its new game plan, it may try to build social communities through sports and other entertainment content.

In line with this trend, Facebook is said to be readying to invest upwards of $1 billion in original content over the next year. This could be a departure from its earlier plan of becoming like YouTube—offering content from everywhere and sharing advertising revenue with content creators who use the digital platform. Earlier, reports indicated that Apple, the world’s biggest tech company, has earmarked $1 billion in spending on original entertainment content over the next year.

Netflix and Amazon, however, have fatter budgets—in the region of $6 billion and $4.5 billion, respectively. But the video ambitions of Facebook are apparent and seem to grow only bigger.