With a commitment of over Rs.20,000 crore in sports in India, Star India is looking to aggressively build its business in the country with the launch of six new sports channels under the Star Sports banner. The new channels— Star Sports 1,2,3,4 and HD-1 and HD-2—will sport a new logo and go on air from 6 November with the Indian cricket team’s captain M.S. Dhoni as a brand ambassador. Sanjay Gupta , chief operating officer at Star India Pvt. Ltd, shared the broadcaster’s plan for sports content and why digital is the way to go. Edited excerpts:
Your company has said it has set aside $2 billion for the next five years for sports. How will you use this? We are committed to over Rs.20,000 crore of investment (in sports) in this country. Fundamentally, sports fans have been irregular viewers of content on TV. Within the time they spend, almost 80-90% of it is spent on cricket. What we need to do is to ignite the passion for sports and get people to spend a lot more time watching it on TV. We are retiring brand ESPN in this country. The two things we want to invest in, in a big way are..., first,...cricket. Today, cricket is limited to India playing international matches and Star Cricket (the cricket-only channel in the Star India network) has become synonymous with Star Sports in this country. That is the only thing people associate with and watch. We believe cricket is much larger than Star Cricket, which is also why we are retiring the brand. It goes away and becomes Star Sports. So it almost becomes one Star Sports with 96 hours of content available in a day across four standard-definition destinations. We have been doing a lot of international cricket, but we want to double down on domestic cricket and university cricket. We want to develop the 150-160 days of domestic cricket and spend time getting university cricket and women’s cricket. We’ve seen the response to that on ground. Clearly, there is a high desire for local content. The other thing is, we cannot be a one-sport country. We want to invest in building other sports, whether it’s hockey, badminton or football. Not only are we investing in what goes on air, but in also shaping sports by investing in the leagues. We genuinely believe that if we need to change the degree of engagement that sports fans have with content, then we really need to invest in content. But isn’t doing away with Star Cricket a risk? Yes, it is risky, without a doubt. But we also believe that, possibly, Star Cricket as a brand and destination, came in the way of sports in this country. From a broadcaster’s point of view, because it’s a 24-hour channel, it restricted the amount of content we created for it. The amount of cricket has to go much beyond, and will be the driver for all our channels (Star Sports 1,2,3,4). We are increasing the amount of time cricket gets on air and offering a lot more options within cricket as well as beyond cricket (other sports) to audiences. Star Sports 3 is to be in Hindi. What is the potential for sports in regional languages? We expect to take cricket into many more languages beyond Hindi, such as Tamil, Bengali, Marathi and Kannada. Over the next few quarters, we really want to go beyond Hindi and English. If you look at the total content consumption in this country, only 2% is consumed in English—if you take all English news, movies and drama channels that get beamed in this country. The remaining 98% is in local languages. That tells you about the opportunity we are missing. Broadcasters have not invested in making the sports content locally relevant for fans. Our belief is that one reason why our sports engagement has been so low, beyond infrastructural issues and sports not being core, is that it hasn’t been available in the local language. By putting it in a local language, we are opening up 50 times the possible opportunity and growth. What are your plans for starsports.com? It’s a bottle that we opened only nine months ago and within that time we’ve already got 15 million unique visitors. What we’re doing on television, we will do bigger and better online as the medium allows you to showcase more content and that too in a bigger manner. We’ve already got cricket, Formula One and football on it and we will expand that as we go along. But more importantly, it is an extremely interactive medium where consumers can start engaging even more deeply with the sports they watch. They may use it as a second screen (when they are watching TV) or even as a first screen. So a lot of investment will go into that. A lot of youngsters want to engage with sports and devices, mobile phones, tablets will play a very meaningful role in sports consumption. We’re using technology to deliver a much better experience to consumers. Star Plus has been a market leader for some time now. The regional channels have also done well. You’ve now announced huge investments in sports. What next? The current priority is sports, but beyond that, we definitely want to focus on digital. We have done well on television, but we think this country is ready for consumption of content on other devices and we are using sports to invest significantly in that direction, with starsports.com as well. Our beachhead into digital is through sports, as it is targeting the same audience, young men and women, who will consume content on new media. This is a big investment we are making and it is also opening up an opportunity for Star India—we will lead with sports and follow with movies and drama, in that order. What is your view on the 12- minute ad cap (the broadcast regulator has capped advertising at 12 minutes per hour of programming, including two minutes for in-house advertising)? One of the largest advertisers in India,Hindustan Unilever Ltd (HUL), has stopped advertising on your network because there is no agreement on ad rates (following the cap, some channels sought to increase ad rates to compensate). The impasse with HUL continues. But we strongly believe that at the core of every content business lies a great viewer experience. If something comes in the way, it brings down value. Some channels had so much advertising that it was difficult to know whether the channel was running ads or content. We have reduced ad inventory anywhere between 15% and 18% to comply with the ad-cap rule, so in the short term, it hurts. It does affect our revenue. But in the long run, it is good for the industry and the consumer. We are talking one-on-one with each of the key advertisers and explaining why we are doing what we are doing. There is a lot of misconception that we have done this voluntarily. It is the law of the land, our broadcasting licence is based on the condition that there is a 12-minute ad cap. We cannot be wilfully ignoring it. Critics argue that Star India bailed the Indian cricket board BCCI out with the sponsorship for Team India. Was that done with the idea of eventually grabbing the rights to the Indian Premier League (currently with Multi Screen Media Pvt. Ltd)? Nobody bails anybody out… BCCI (Board of Control for Cricket in India) is too big. Sachin Tendulkar’s last two test matches start now and we were very keen to use that opportunity to announce the new sports network. We are using this sponsorship to make Star Sports bigger than it already is. You can really bring alive the new logo on ground, talk about the philosophy of Star Sports through commentators, and pre- and post- (match) shows on the network. This was a good sponsorship for us. People have seen ESPN, Star Sports, Star Cricket for the last 10 years in this country. To change it, you need a very meaningful and impactful advertising campaign. These matches with Sachin (Tendulkar) will reach a huge audience. In terms of sheer audience aggregation, it is a huge opportunity, and we expect that at least 100 million people will tune in for one test match.