WE WILL BREAK EVEN ON IPL THIS YEAR ITSELF

BY IMPACT Staff

BY NAZIYA ALVI RAHMAN

One question that has been on everyone’s mind since Star India acquired the global media rights for the Indian Premier League (IPL) at a whopping price of Rs 16,347.5 crore in September 2017 is – when and how will Star India recover the money it paid to buy IPL? According to calculations made post the much-hyped Board of Control for Cricket in India (BCCI) auction in which Star beat big players such as Facebook, Reliance Jio and Sony, Star would have to pay Rs 54.5 crore per match of IPL.

While most experts predicted that the network would take two to three years to break even on IPL, the man sitting at the helm of affairs at Star India is not ready to wait that long. “We will break even this year itself,” declares a confident Sanjay Gupta, Managing Director of Star India. “We will do a turnover of Rs 2000 crore.”

Gupta’s confidence comes from the big jump in ad revenue that Star India claims to have seen, early in the IPL season, having sold TV and Digital inventory together. “Last year, the total turnover was Rs 1200 crore, which included TV and Digital. So we are looking at roughly a 60% growth in advertising revenue in IPL 11,” Gupta says.

On reported steep increase in ad rates this year, Gupta has a ready reply: “Good things come at a good price.” Despite the high price of IPL ad spots, the overall national demand was so much that the network has been running full on ad inventory for the last two weeks with almost no space to take more, claims Gupta. “We have very little inventory unsold for the next few weeks as well,” he adds.

According to Gupta, the advertisers who have invested in IPL believe that the league will surely give them value for money, and the growth that these brands will experience after IPL will only reaffirm this faith in IPL.

THE REGIONAL PLAY

This is the first time that IPL has entered the regional markets - Tamil Nadu, West Bengal, Andhra  radesh and Karnataka – through language feeds, and Gupta is quite positive about the performance in these markets. “Our regional feeds are doing extremely well.

Until last year, we only had feeds in Hindi and English but a lot of advertisers these days do regional ads and these feeds are helping brands to talk separately to each of these markets. However, we did not get time to reach out to exclusive regional players this year. This is one area we will explore more next year,” he states.

The Rs 2,000 crore turnover that Star India expects is only the ad revenue. Apart from this, it has already put live matches on paid channels and hiked its distribution cost ahead of the league. While market sources claim Star sought a hike of up to 40%, Gupta says it was ‘reasonable and nominal’.

“When it comes to distribution strategy, we believe that sports should be made available to every consumer in the country. Sports, especially cricket, has mass consumption. So the strategy is to make mass cricket available easily at low price and then have specialized fanbased content, which will be available at a higher price for those who are ready to pay,” Gupta explains, adding that the network wants cricket to reach more and more people and would like to contribute towards it. “Largely, our strategy has been to make IPL available on Star Sports and take this channel deeper to every consumer,” Gupta says. As of now, the broadcaster is still considering whether to air the semi-finals and finals on Star Gold.

MORE MARKETING INNOVATIONS

Gupta is also excited about various marketing innovations introduced this season. “In the Digital domain, in terms of performance advertising, we have introduced many new features. For example, you can order a pizza through a Dominos ad while you watch a match or order food on Swiggy, which is advertising a lot with us this year,” he says.

Another much-talked-about technological addition is Adserve - a self-service ad tool aimed at empowering advertisers to harness the power of digital video at scale - on Hotstar. Gupta says the tool will be very helpful for advertisers, especially those in small and far-off cities. “As we start leveraging Adserve, the number of advertisers will grow. This is the very first attempt.

It will become better and better over the next few quarters. In future, we will make technology platforms very customercentric for the advertiser to leverage the best value,” Gupta says. “Overall, I feel advertisers will see a lot of value for the money that they are putting in.” He is also positive about the growth of cricket in India and expects IPL, with its huge popularity, to be the driver of this growth.

“As of now, the average consumption of sports in India is five minutes a day. If you go to markets like Asia, America or Europe, sports is consumed 45 minutes a day per consumer. So we have a huge headroom for growth,” he says. “Sports, especially cricket, consumption will grow dramatically over the next 10 years. And if cricket grows, IPL will be the driver of this growth because it is the easiest to watch. IPL is a very good tool to keep the power of cricket growing in this country. From the business point of view, IPL is the best tournament to own and build.”

Looking at the challenges that the network has faced so far, Gupta says one of the biggest challenges was how to make something as big as IPL even bigger and give brands value for money. He has the answer too: “Two things are important - first, what have we done in IPL that makes us confident about what the outcome would be and second, how to look at this outcome.

We have made cricket the core of IPL. In terms of the feeds, we have the Superfan feeds, the dugout initiative and Best vs Best to engage viewers,” he says.

“Finally, it is all about cricket and cricketers being the heroes and rest of the world just saluting them,” he concludes.

@ FEEDBACK
naziya.rahman@exchange4media.com

Tags : Interview