Time for IPL to rely on hybrid revenue model
The Indian Premier League (IPL) may be garnering viewership but the media spends by brands on the league remain sluggish. Though media industry experts insist that advertising picks up as the league progresses, IPL this year may face a challenge from TV news channels making a bid for ad budgets of brands keen to tap into higher viewership during election coverage. general elections in the country will be held between April 19 and June 1 and the IPL that kicked off on March 22 will end on May 26. While the two events are overlapping, the advertising money will be further stretched as ICC Men’s T20 World Cup starts on June 1.
Amid buzz of soft spot rates for IPL, Jiocinema, the official streaming partner for IPL, said the inaugural match saw 11.3 crore viewers logging into the game, a 51% increase compared to the first IPL match in 2023. Disney Star, too, said on opening day 16.8 crore unique viewers watched the IPL broadcast on the television network. Jiocinema, the OTT service operated by Viacom18, said that the season had kicked off with a record 18 sponsors and more than 250 advertisers.
But media industry experts involved with IPL said that advertiser response to the league has been muted so far and the ad rates for TV and digital have not increased. Viacom18 did not respond to HT’S queries on ad rates or viewership trends.
Sports marketing expert Indranil Das Blah said IPL rates have remained flat as people are generally cautious about spending in an election year. “Besides, spot rates for the league are already steep. It is not easy to increase the price year-on-year,” he said. Advertisers are seeking better Return on Investment during IPL.
A broadcast sector executive said the ad rate problem has its genesis in last year’s fierce battle between Jiocinema and Disney Star to win more advertising money from brands as 2023 was the first year when the media rights for TV and digital were split between Disney Star and Reliance-backed Jiocinema respectively. Prior to that, Disney Star had both TV and digital media rights for IPL.
The bitter rivalry between the two broadcasters benefited media buyers and advertisers who played them against each other for better deals. “We thought there will be some respite this year since the two media companies have announced the intent to merge. We are not fighting against each other but advertisers are wiser and adamant on old ad rates,” the executive said declining to be named.
Ad rates have softened at a time when several advertiser categories have also disappeared.
With fiascos like Byju’s and Paytm, both ed tech and fin tech firms are not seen splurging on IPL. Additionally, with the department of consumer affairs pushing for more stringent norms on surrogate advertising, both alcohol and tobacco firms using surrogate ads are more vigilant about making a splash during IPL.
“With betting apps not being allowed to operate, broadcasters have also been asked to be careful about the kind of advertising we accept from gaming firms,” said a person familiar with the development.
In general, the government is more watchful of erring advertisers, which is what might be keeping some of them away from a high-profile property like IPL. Earlier this week, Central Consumer Protection Authority (CCPA) requested the ad industry’s regulatory body Advertising Standard Council of India (ASCI) to forward any advertisement that is non-compliant with the ASCI Code and could potentially violate the Consumer Protection Act, 2019 and its guidelines, to the authority for appropriate action.
When Jiocinema made IPL free to watch on the app last year, the property became totally dependent on advertising to generate revenue. In the previous five-year rights cycle, Disney Star had IPL behind a paywall both on TV (Star Sports) as well as streaming (Hotstar). As a result, it earned a healthy subscription revenue. Even last year, despite IPL being offered free on the JioCinema app, Disney Star managed to make nearly Rs 1,000 crore from pay TV subscriptions during IPL.
Having committed Rs 48,390 crore to BCCI, the official broadcast and streaming partners must now supplement the advertising income with subscription revenue from viewers and build a hybrid revenue model instead of being at the mercy of advertisers. Going by the viewership numbers, the property has its buzz and charm intact.
ADVERTISING RATES FOR IPL HAVE REMAINED FLAT AS PEOPLE ARE GENERALLY CAUTIOUS ABOUT SPENDING IN AN ELECTION YEAR, SAY EXPERTS