Mukesh Ambani’s group ultimately dropped the pursuit of television broadcast rights to India’s top cricket league that Walt Disney Co. secured for $3 billion as the Indian conglomerate saw limited opportunity for long-term profit from the legacy platform.

Viacom18, the joint venture between Ambani’s Reliance Industries Ltd. and US media giant Paramount Global, instead focused on winning the rights to digitally stream the lucrative Indian Premier League, betting its advertising revenue will be four-fold bigger than that for TV in five years, a person familiar with the group’s strategy said.

The view was that television would struggle to deliver double digit growth, according to the person, who didn’t want to be identified discussing deliberations that were private.

While Viacom18 Media Pvt., the Ambani-Paramount JV, bid for TV rights in the initial rounds of the auction, this person said the focus was always on ensuring it secured digital rights. A representative for Reliance Industries declined to comment on the auction strategy, a Bloomberg report said Friday.

Viacom18 paid Rs. 238 billion ($3.1 billion) for the rights to stream the IPL tournament, one of the world’s most-watched sporting events, almost on par with what Disney shelled out. The decision gels with Ambani’s ambitions for his digital unit Reliance Jio Infocomm Ltd.

The billionaire, currently India’s richest man, wants to create a consumer ecosystem that marries entertainment and e-commerce to lure local users who are increasingly hooked to their smartphones.

The decision to let go of television rights saved Reliance billions of dollars, funds that can potentially be used to boost the conglomerate’s chances in the upcoming India auction for 5G spectrum. A prized cricket broadcast, which can add millions of subscribers, streamed on a speedy wireless network can be a potent mix for turbocharging Jio.

“The Jio DNA in Reliance gives them the foresight and the conviction to stay with very long-tail customer acquisition strategies,” said Utkarsh Sinha, managing director in Mumbai-based Bexley Advisors.

Jio debuted in 2016 and blew out competition to emerge the top telecom player. “They go for complete scale domination, and IPL has historically proven to be one of the most reliable properties” for adding sticky consumers on an OTT platform, Sinha said.

Jay Shah, the head of Board of Cricket Control in India, said in a separate interview that the country may see 900 million internet users in five years, underscoring the potential of digital rights.

While TV was the staple source of entertainment in Indian middle class homes, the past few years have seen a rapid pivot toward online streaming — a trend exacerbated by the pandemic.

Reliance will be using its IPL rights as a tactical asset to build out streaming and digital platforms, including Voot, Jio and others, this person said.

Viacom18 has already secured media rights in soccer, badminton, tennis and basketball events, giving it a diverse portfolio of sports assets.

IPL’s streaming rights will propel Viacom18’s position in the local OTT market, according to Jai Lala, chief executive officer at media consultancy Zenith.

“It will help Viacom18 to command better market share from its current No. 4 position, but it has to generate adequate content to engage subscribers when there are no cricket matches,” he told Bloomberg.

Media Experts Divided Over Prices: Meanwhile, the humongous sum of Rs 48,390 crore  (approximately $ 6.2 billion) fetched from media rights of IPL cricket has divided industry experts, with some feeling that the market can easily absorb it, while others said anything ‘puffy and inflated’ puts pressure on the sport, a PTI report had noted on Wednesday

For advertisers, two separate entities bagging the TV and digital rights augur well as it would give them more options, according to a PTI report.

According to Rediffusion Managing Director Sandeep Goyal, the market will easily absorb the increase in prices of the IPL television rights, while on the digital front a complete metamorphosis could be expected in the OTT space like what Jio did to mobile telephony.

“Disney Star has ended up with a sweetheart of a deal on (TV) broadcast rights,” Goyal told PTI.

According to media reports, while Disney Star retained the Indian subcontinent TV rights by paying Rs 23,575 crore (Rs 57.5 crore/game), the most sought-after India digital rights deal was acquired for Rs 20,500 crore by the Reliance and Bodhi Tree-backed Viacom18, which also won the non-exclusive Package C of 18 matches by paying Rs 2,991 crore more.

The deal for Package A and B (TV and Digital) is for 410 matches across five years with 74 matches each in 2023 and 2024 and 84 each in 2025 and 2026. The 2027 edition will have 94 games. The Package ‘D’ for overseas rights for various regions was bagged by Viacom18 and Times Internet.

Viacom18 entered the fray through a consortium which boasted of former Disney APAC chairman Uday Shankar-James Murdoch combine in it.

”I am thrilled to announce that STAR India wins India TV rights with their bid of Rs 23,575 crores. The bid is a direct testimony to the BCCI’s organisational capabilities despite two pandemic years,” BCCI Secretary Jay Shah tweeted on Tuesday.

”Viacom18 bags digital rights with its winning bid of Rs 23,758 cr. India has seen a digital revolution & the sector has endless potential. The digital landscape has changed the way cricket is watched. It has been a big factor in the growth of the game & the Digital India vision” Shah added, exulting that since its inception, IPL has been “synonymous with growth”.

“IPL is now the 2nd most valued sporting league in the world in terms of per match value,” the BCCI secretary said.

The IPL, in terms of sheer valuation, will now be bracketed in the top-most sporting properties alongside National Football League (USA), NBA and English Premier League football, the most watched sporting events in the world.