Star India and Multi Screen Media are doing what they can to protect their media rights and set up an infrastructure that allows them to optimize and monetize these. Photo: AFP
When the India-New Zealand cricket series kicked off last month, Indian fans surfing popular sports websites such as Cricinfo.com andCricbuzz.com for live scores found the updates coming with a 15-minute lag.
They weren’t aware that the broadcaster for the series, Multi Screen Media Pvt. Ltd, had dragged those sites, along with Radio One from Next Radio Ltd, to court.
Giving ball-by-ball updates, live commentary, live text commentary and alerts, among other things, infringed the network’s media rights, the broadcaster argued. Next Radio operates Radio One in seven cities, while Multi Screen Media operates a bouquet of entertainment channels in India and telecasts cricket matches on Sony SIX.
This squeeze on Indian cricket fans is not new.
In September 2012, Star India Pvt. Ltd, media mogul Rupert Murdoch’s Indian television company, took two mobile operators, Idea Cellular Ltd andOnMobile Global Ltd, and the website Cricbuzz.com to the Delhi high court for disseminating ball-by-ball SMS updates of scores to their subscribers. Subsequently, in September 2013, the matter was taken to the Supreme Court.
In its interim order in October 2013, seen as a boost for Star India, the Supreme Court asked telcos and value-added service providers to depositRs.10 lakh per match with the court before delivering sports updates.
The matter is still pending in court and is expected to come up for hearing in March.
Star India’s action was supported by the Board of Control for Cricket in India (BCCI), the country’s apex cricket body from which Star had purchased broadcast, Internet and mobile rights for Indian cricket from 2012 to 2018 for around Rs.3,851 crore.
In both the cases, the websites argued that they were in fact only delivering content that was already in the public domain and were, in fact, doing a public service by disseminating information on cricket scores. Their contention has received much support from fans.
“Nobody owns the game. The BCCI presumes it does, but it doesn’t. To the best of my knowledge the BCCI is a non-profit organization, which was given the mandate to run the game in the interest of the public—not to gift-wrap it and sell it to the Wal-Marts of the world. There has to be some limit to their greed. They sell the rights, and then bombard the broadcast with ads. All of which the fans tolerate. But to deny them updates on one ball or a run is a bit much,” said Prem Panicker, managing editor of Yahoo India, which is also posting updates with a 15-minute lag.
“Nowhere in the world does any sport put scores behind some sort of a paywall. They do monetize the game, but also concede that scores are public domain information.”
The decision of the Supreme Court in the Star India case is likely to have far-reaching effects.
“It really is a legal question. However, it will define how these rights will be viewed in this country. Especially now, considering that the battle (between content providers) is being fought across devices, especially on mobile. As broadband speeds improve, consumption of content will move to different devices. Lines are also blurring between broadband and broadcast. So while it is still early days, people are trying to establish boundaries. The judgement will define how certain fortunes change over the next 10 years,” said Jehil Thakkar, partner and head of media and entertainment practice, KPMG India.
Experts say the devil lies in the detail.
“The real test of the matter is, does this information have character of copyright?” said Ramesh Vaidyanathan, managing partner at Advaya Legal, a corporate law firm, pointing to an example of weather forecasts by government broadcasters. “Are you in violation of the copyright if you put that information up on your site or use it in any way? The answer is no. As this information was not intended to be protected, it was meant to be shared with everyone. However, in the case of the BCCI, where the information in question is related to a private event such as a match, whose rights have been licensed to someone, it is arguable that that information is copyrightable.”
“So, at least in this case, it is arguable that the unique copyrightable work product is the instantaneous score update which has a commercial value. To be sure, the commercial value is not in the score, but in the time you deliver it at. If you were to carry it a day late, like the newspapers, it would amount into less hits on your sites, less visitors and therefore less advertising and subscription revenues,” explained Vaidyanathan.
One of the key factors that rights holders constantly bring up is the exponential rise in the cost of rights to premier sports properties, and therefore their need to monetize and protect the value of their rights.
For instance, Star India paid Rs.3,851 crore in 2012 for the exclusive media rights to cricket matches organized by the BCCI until 2018. These rights cover all international cricket matches played in India and domestic tournaments, including the Ranji Trophy and the Irani Cup. In contrast,Nimbus Communications Ltd, a television marketing company, paid approximately Rs.2,000 crore to the BCCI for the rights for four years, in 2010. The contract, which was to run till 2014, was terminated after two years by the BCCI, for allegedly defaulting on payments.
“When I have rights that I have validly acquired by investing a lot of money, even I would naturally want to monetize it. Whether it is a website, a mobile service provider, broadcaster or otherwise, we are all in this business to generate value for our shareholders,” said Ashok Nambissan, general counsel, Multi Screen Media.
“And no one is talking about someone posting updates on Facebook; that is irrelevant. But contemporaneous accounts of live action (by the said websites) being described under the garb of public service—that is a serious issue,” said Nambissan. “Having said that, it doesn’t mean that we don’t want to share. If we can arrive at a commercial understanding then we are happy to licence them (rights).”
In some cases, turning up the pressure may have helped the broadcasters. As of now, in the Multi Screen Media cases, Radio One has settled the matter with the broadcaster by paying damages for violating its rights.
In compliance with an order issued by the Delhi high court on 27 January (the court allowed them to deposit Rs.10 lakh per match), Cricinfo.com agreed to deposit Rs.20 lakh for disseminating updates for the last two one-day internationals of the India-New Zealand series. While, Cricbuzz agreed to comply with the interim order of the Delhi high court, delaying score updates and text commentary by 15 minutes, in the Star India case, Idea Cellular has paid the licence fee. Cricinfo.com and Cricbuzz.com chose not to comment on the matter. Vineet Singh Hukmani, managing director ofRadio One, said in a text message the matter had been settled with Multi Screen Media and it did not want to make any further comment. A spokesperson for Idea Cellular said that the mobile service provider “has been making payments to Star India as per the court order for matches which BCCI and Star have an arrangement.”
Digital rights are increasingly an area of focus for media and sports bodies. A consortium led by Times Internet Ltd, the Internet and mobile company of the Times of India Group, paid approximately Rs.261.6 crore for 2011-14 for global rights, including those for the Internet, mobile, radio and television (for certain international territories) to the Indian Premier League (IPL) cricket tournament. The expectations are likely to be higher, say experts, when the contract comes up for renewal later this year.
“Broadly speaking, if you look at the value of digital rights for big ticket sports properties, it’s at about 5-10% of what one would pay for broadcast rights globally. Compare that to five years ago, where the cost of digital rights acquisition would have been closer to 2-3% globally,” said a senior official from a media company, who did not want to be named.
Ravi Krishnan, former head, South East Asia, of IMG, a global sports, fashion and media business, maintains that the “value of digital rights will continue increasing for quantitative and qualitative reasons, especially for properties such as the IPL”. This is because they provide several direct and indirect, short- and long-term revenue streams.
“And let’s not forget all important ‘valuation’ impact. The sale of broadcasting rights is still the key income stream in the business of sport and I believe will continue to be so in the medium term. The digital space is, however, a segue into a whole new world. Broadcasters and, by extension, their advertisers are increasingly focusing on how to engage viewers through ‘multiple screens’. In India for many the mobile will be THE screen. This is certain to be why digital rights in this market may be contested aggressively,” he said.
According to the most recent data from the Internet and Mobile Association of India (IAMAI), year-on-year growth in the number of Internet users was 28% in 2012 and 39% in 2013 to register 213 million Internet users in India as of December last year. Of this, 169 million were active users.
Mobile Internet in India has also grown significantly. In 2012, mobile Internet users grew 111%, while in 2013 it registered a 63% hike to register 130 million users in December 2013. Digital advertising had also been witnessing a steady growth, with the online advertising market in India being projected to reach Rs.2,938 crore by March 2014,
Moreover, in 2013, Indians spent an average of 19 billion minutes watching videos online every month, according to data from GroupM. There were nearly 80% more video views in 2012 than in 2011, and the current market size in India amounts to more than 43 million monthly unique viewers, and over 3.3 billion monthly video streams.
The company said Internet video consumption is expected to increase sixfold by 2016. “Right from the time when we got into sports, we knew that as a genre, it lent itself well to new media...Even the amount of time consumers spend watching a match online is typically 45 minutes, which is on par with the time spent on TV, so there is very high engagement there. We are very encouraged by this,” Uday Shankar, chief executive officer, Star India, had said in January in an interview when the group acquired the digital rights to the IPL.
No surprise then that rights holders such as Star India and Multi Screen Media are doing what they can to protect their rights and set up an infrastructure that allows them to optimize and monetize these rights. During the launch of the new Star Sports network last year, Sanjay Gupta, chief operating officer of Star India, said that sports and digital media were the big focus areas for the company.
“Digital should be an incremental leap in the way people consume sports. But if you look at the current crop of digital sports service companies, it has been a huge regressive step backwards, because essentially you’re trying to describe a match through text commentary,” said Ajit Mohan, executive vice-president and head, New Media, Star India. “This has happened for several reasons: the first is that the fundamental infrastructure was not in place to deliver a high-quality sports video experience. The second was a failure of imagination, looking at this medium and saying what is the next evolution of sports consumption, if HD (high definition) was the big thing on television, part of the story for us was, how do you bring data and analytics into the live video experience? And third was that no one was willing to invest in the rights. Starsports.com is trying to do all three. It is in this light that you must see what Star and some of its peers are trying to do,” he said.
Nitesh Kripalani, executive vice-president—new media, business development and digital/syndication at Multi Screen Media, agreed. “As rights holders we want to hold and control all the rights for a property as we want to be the destination for the sport and wow the consumer. So while some may argue that the information is in the public domain, as rights holders we need to be compensated for the investments we are making,” he said.