Would Amazon Beat Disney for Cricket Streaming Rights in India?

Amazon (AMZN) has signaled its interest in participating in the auction for media rights to India’s top cricket league matches, according to a Bloomberg report. The e-commerce and cloud computing giant is among the top online video streaming providers in India through its Amazon Prime Video brand. AMZN stock jumped 3.5% to $3,162.31 on April 19.

Don't Miss our Black Friday Offers:

Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

Walt Disney (DIS) and Sony (SONY) have also signaled interest in bidding for the Indian Premier League (IPL) media rights. Cricket is a popular sport in India, with IPL attracting 380 million viewers last year, according to the report. The IPL media rights to be sold will be for the 2023 to 2027 editions. The service that wins the rights to show the games may be able to sign up millions of new subscribers.

India presents a lucrative but highly competitive video streaming market. Spending on subscription video streaming services in the country is forecast to hit $1.31 billion in 2022 and grow to $2.16 billion by 2026. Disney has the lion’s share of the subscription video streaming market in India, with Amazon coming next.

Where Does Video Streaming Fit in Amazon’s Strategy?

The Prime Video service can be purchased as a standalone plan, but it is primarily offered free as part of Amazon’s Prime membership program. The membership costs 179 rupees a month or 1,499 rupees a year in India.

It offers a variety of benefits, such as free delivery of Amazon shopping orders, early access to sales events, and video and audio entertainment. Prime members are loyal Amazon retail customers, spending significantly more money on Amazon shopping than standard customers do.

Wall Street’s Take

On April 18, Evercore ISI analyst Mark Mahaney reiterated a Buy rating on Amazon stock with a price target of $4,300, which indicates 36% upside potential.

Consensus among analysts is a Strong Buy based on 34 Buys, one Hold, and one Sell. The average Amazon price target stands at $4,110.12 and implies upside potential of 30% to current levels. Shares have declined 5.2% over the past year.

Hedge Funds

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in AMZN is currently Very Positive, as 96 hedge funds increased their cumulative holdings of the stock by 457,400 shares in the last quarter.

Key Takeaway for Investors

There are several benefits for the company if Amazon wins the IPL media rights. In addition to boosting Prime Video standalone plan subscriptions, Amazon would also be able to draw more customers to its Prime membership program to fuel subscriptions and retail sales.

Discover new investment ideas with data you can trust.

Read full Disclaimer & Disclosure