IPL, THE STAR!

San­tosh N, Manag­ing Di­rec­tor, Duff & Phelps In­dia says the months of April and May will stay de­mar­cated as IPL ter­ri­tory, where noth­ing else sells… Not even Bol­ly­wood!

Impact - - FEATURE -

Last week’s In­dian Premier League (IPL) broad­cast­ing rights auc­tion was keenly con­tested among some of the world’s top broad­cast­ing houses. Star TV Net­work, which al­ready owns some of the mar­quee prop­er­ties such as English Premier League, Pro-Kabaddi League, In­dian Soc­cer League, ICC events and matches played by the In­dian cricket team within In­dia, now holds the hottest of all those prop­er­ties, the IPL, for the next five years. In our re­cently re­leased re­port, ‘IPL: The Decade Edi­tion - A con­cise re­port on brand val­ues in the In­dian Premier League’, we had pre­dicted the broad­cast rights to go for a min­i­mum of $2.10 bil­lion, whereas Star won it for a mas­sive $2.55 bil­lion with the con­sol­i­dated bids of all other bid­ders around $2.47 bil­lion. The num­bers, though stag­ger­ing, are not sur­pris­ing. In our re­port, we had men­tioned that the deal may fol­low the prece­dent set by some of the big-ticket broad­cast­ing deals across the world such as EPL, NBA and Ma­jor League Base­ball (MLB). Th­ese leagues have seen a con­sis­tent multi-fold growth in their broad­cast­ing rights and IPL has now fol­lowed a sim­i­lar trend.

The IPL has emerged as the premier sport­ing event in In­dia with a global view­er­ship and a fan­fol­low­ing un­matched by any other crick­et­ing league. In just 10 years, the IPL has mor­phed into a me­dia beast that could soon ri­val the decades old ma­jor sport­ing events across the world. In our anal­y­sis, we had es­ti­mated the IPL busi­ness value to be $5.3 bil­lion, which will go up by 10% to 15% post the me­dia auc­tions. We are now talk­ing about a prop­erty worth nearly $6.0 bil­lion! No one could have pre­dicted that IPL would be­come such a huge hit when it was first con­cep­tu­al­ized in 2007 and when the fran­chises were first awarded to a group of cor­po­rates, in­di­vid­u­als and celebri­ties.

The con­tin­ued un­prece­dented re­sponse from ad­ver­tis­ers, broad­cast­ers, spon­sors, af­fil­i­ates, part­ners and the view­ing public year af­ter year, has made the IPL the most keenly awaited event in the cam­paign cal­en­dar for ad­ver­tis­ers and the most viewed sport­ing event for TV view­ers in In­dia.

As per BARC, IPL 10 had 1.25 bil­lion im­pres­sions across the five Sony tele­vi­sion chan­nels broad­cast­ing IPL (an in­crease of 22.5% over last year when 1.02

bil­lion im­pres­sions were recorded). Of the 1.25

bil­lion im­pres­sions, nearly 45% of the to­tal view­er­ship came from

ru­ral In­dia which is fur­ther ev­i­dence of IPL’s

pan-In­dia reach.

IT WAS ALL OR NOTH­ING FOR STAR

It was very clear from Star’s auc­tion strat­egy that it was all or noth­ing for them and that shows the mas­sive con­fi­dence they have in this prop­erty. Star was also en­cour­aged by the multi-fold growth in its OTT plat­form Hot­star’s viewer base, where nearly 27 mil­lion peo­ple viewed IPL on Hot­star in 2014, which jumped mul­ti­fold to 130 mil­lion view­ers in 2017. Also, Hot­star’s ad­ver­tis­ing rev­enues from IPL dou­bled from Rs 60 crore in IPL 9 to Rs 120 crore in IPL 10.

IPL & Hot­star were also hugely ben­e­fited by the cheaper and af­ford­able ac­cess to In­ter­net and mo­bile tele­vi­sion due to the tug-of-war in In­dia post Reliance Jio’s en­try into the mar­ket.

This splurge in on­line stream­ing of IPL and the gain­ing mo­men­tum of OTT as a medium to watch sports on­line, was also one of the key rea­sons for com­pa­nies to show will­ing­ness to ac­quire dig­i­tal rights for stream­ing IPL. Star will be look­ing to lever­age heav­ily on this model.

Star will also be en­cour­aged to know that IPL 10 was a mas­sive suc­cess com­mer­cially for Sony. As per BARC, IPL 10 had

1.25 bil­lion im­pres­sions across the five Sony tele­vi­sion chan­nels broad­cast­ing it (an in­crease of 22.5% over last year when 1.02 bil­lion im­pres­sions were recorded). Of the 1.25 bil­lion im­pres­sions, nearly 45% of the to­tal view­er­ship came from ru­ral In­dia which is fur­ther ev­i­dence of IPL’s pan-In­dia reach. This in­crease is aligned with the change in de­mo­graph­ics, TV own­er­ship and con­nec­tion type, to name a few fac­tors.

Lever­ag­ing on the pop­u­lar­ity of the 10th sea­son, Sony Max (the of­fi­cial broad­caster of IPL) be­came the most-watched tele­vi­sion chan­nel across gen­res dur­ing the sec­ond week of the sea­son. Star would have also con­sid­ered that IPL was im­mune to de­mon­e­ti­za­tion where even with busi­nesses suf­fer­ing, Sony was able to in­crease their IPL ad­ver­tis­ing rev­enue from Rs 1,200 crore last year to Rs 1,300 crore for IPL 10. In fact, Sony’s IPL ad rev­enue has seen a steady growth from Rs 700 crore dur­ing IPL 7 to Rs 1,300 crore for IPL 10. Star, with vir­tual mo­nop­oly of all the mar­quee sport­ing as­sets in In­dia, will be able to com­mand a higher dis­tri­bu­tion fee from ca­ble dis­trib­u­tors now.

The way var­i­ous spon­sor­ship and me­dia rights re­newals have grown multi-fold over the 10 years of

IPL, has pro­vided us with a glimpse of what to ex­pect in the next 25 years. It will be safe to say that for the fore­see­able fu­ture, the months of April and May will stay de­mar­cated as IPL ter­ri­tory where noth­ing else sells. Not even Bol­ly­wood!

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