The presence of three key ICC events in India is a major reason for the jump in the rights value, Star India president sports Nitin Kukreja told TelevisionPost.com.
Out of the six major events in the ICC rights cycle this time, around three are in India.
“That played a part in everybody’s thinking regarding the rights. It was reaffirmation of our relationship with cricket,” Kukreja said.
Last month, Star India retained the ICC rights till 2023 in a deal said to be in the range of $1.8–1.9 billion. For the earlier eight-year cycle of the rights from 2007, the ICC had got $1.1 billion.
Kukreja said that the bid also took into account the consumer value that the ICC rights deliver and the ability to monetise those rights both from an advertiser and subscription perspective.
He said that subscription revenue accruing from digitisation will help broadcasters to invest money back in content. Star India has started bundling sports with entertainment channels for offering it to cable TV and direct-to-home (DTH) operators.
Recently, the broadcaster decided to offer its channels only on a la carte rates. As per RIO (Reference Interconnect Offer) agreement signed between Star and multi-system operators (MSOs), sports channels will be offered in a second pay pack to drive ARPU up.
The off-take for Star Sports is expected to go up significantly during the ICC Cricket World Cup 2015, which will be played from 15 February to 29 March.
“Digitisation is not about revenues alone. Digitisation revenues will flow back to content which will make content better and better. If the revenue line from digitisation flows, then most of it will go to creating better content. It is not that margins for companies will inflate to 40–50 per cent,” he explained.
Having big tournaments in India will lead to much more buzz. “The buzz around a sporting event is so much higher when it is nearer to you. You can see it in the ISL (Indian Super League), in the Pro Kabaddi League. When the event is at home then the excitement is so much higher,” he noted.
Facing competition from BT Sport, Star India’s sister concern Sky Sports was also part of the bid to show international cricket under the ICC in the UK. It has been learnt that Sky’s agreed payout is around $200 million.
Kukreja said that the syndication deals with broadcasters outside the UK will be on event-to-event basis. “Deals will be structured differently depending on the demand for the game. Some might be eight year deals; others might be four year deals. In other territories we will sell it on an event-to-event basis.”
An area where Star will save cost is production. “This time the ICC has kept the host broadcast rights with themselves. So it is a cost saving for us.”
Star is considering regional-language feed for next year’s cricket World Cup. “We are considering it. We will announce it as and when the time comes.”
Kukreja also feels that timing will not be an issue for next year’s World Cup as viewers can use new media also to consume the matches. “A lot of India games will be on the weekend. You will get viewership on those days and also for non-India games. I am not concerned about the timings at all.”
Star has the licences for three more channels. But a decision has not been taken as to what they might be. “We have not fully fleshed out the plan. These are only licences so far. There are a few procedural matters left,” he stated.
Kukreja is happy about the progress that Star Sports 3 has made. “Two-thirds of our cricket viewership happens on Star Sports 3. This shows that the Hindi proposition was justified,” he said.