Face off: Star Sports revenue

It’s been a roller-coaster ride for Star Sports, the official broadcaster of the ICC World Cup. First, Star Sports was scrambling to get advertisers on board. Then, it had to share the World Cup feed with public broadcaster Doordarshan. But with the Men in Blue defeating arch rival Pakistan on February 15, all this has been forgotten. The back-to-back wins against South Africa and UAE have added to the euphoria.

According to industry estimates, advertisers who bought inventory for the India-Pakistan match at the last moment had to pay R25 lakh for a 10-second spot. India is next scheduled to play against West Indies, Ireland and Zimbabwe. If it makes it to the quarter finals, analysts claim last-minute buys would go for R35-40 lakh. In a conversation with FE BrandWagon’s Anushree Bhattacharyya, Sanjay Gupta, chief operating officer, Star India talks about how the tide has turned in favour of the broadcaster and its plans to maximise revenues from the game. Edited excerpts:

It would be wrong to compare the IPL which is a domestic league with the biggest game of cricket which is held only once in four years. The World Cup, which is organised at a global level, will remain the biggest cricketing event, and will always find its share of advertisers. The IPL’s popularity has had no impact on the World Cup. For instance, this year the World Cup got many first time advertisers. And now with the Indian team playing well it has not only given  confidence to advertisers, it has also generated audience interest. The release of the ‘mauka mauka’ campaign right before the biggest game in the tourney, that is the India versus Pakistan, also helped. What worked for us is the combination of India bettering its game and our campaign. And today advertisers are willing to pay a good amount of money to be part of the tourney.

Only 2% of the population consumes English content, the rest prefers to watch content in their own language. This is true even in case of entertainment content and that is why regional channels are doing well. The fact that the tourney is being telecast in six languages has given an opportunity to local advertisers to come on board. We had several options, right from selling the highlights separately to India matches being sold as stand-alone properties, which made it easier for advertisers to pick and select spots. While some advertisers joined us at the beginning for the entire tourney, some are now coming on board. As for an increase in our revenue, we expect more than 60% growth since the 2011 World Cup.

Being one of the biggest productions of the year, we introduced several innovations. We broadcast certain select matches, including the India versus Pakistan match, in the 4K format. We also introduced a technology called ‘remote production’. This is the first time that the tourney is being telecast in Bengali, Tamil, Malayalam and Kannada, apart from English and Hindi. Drone cameras were also installed to give an aerial view of the matches.

Being the number one entertainment company, the stakes were high this time. Nonetheless, our strategy of having a big team of experts to ensure there was enough and more content worked in our favour. Additionally, ideas such as roping in actor Amitabh Bachchan as a commentator for the India versus Pakistan match helped in drawing viewers’ attention. We also upped our ante in the graphic department by gathering analytics on players with 4000 hours of match footage, ball-by-ball data from 600 matches, basically, one-day matches played since 2010.

Our digital property was already getting one million views per month. But it made sense to launch a complete product that would have content from across the genre. Our on-demand video platform Hotstar got 25 million viewers for the India vs Pakistan match. As for revenue, currently digital’s contribution is very small. But this is a five-year game plan. We are gearing up for the future with Hotstar.

Harsha Joshi is executive vice president—group trading, Dentsu Aegis Network. An industry veteran, Joshi realises that the ICC World Cup which once used to be the top media platform for advertisers, now has the Indian Premier League (IPL) as a strong contender. However, she believes that if India continues its winning streak at the World Cup, then advertisers will continue to flock to the game. At the same time, the IPL will too have its set of loyal advertisers this April.

In a conversation with FE BrandWagon’s Anushree Bhattacharyya, Joshi talks about how both Star and SET are expected to earn R600-700 crore each from the World Cup and the IPL, respectively. Edited excerpts:

For a country like India which has a huge fan following for the game of cricket, the World Cup is a big and important vehicle for advertisers to reach out to their consumers. Not to forget that India is the defending champion, which makes the tourney even more important. However, this year it did not attract too many advertisers initially since the matches are being played in Australia and there is a time difference too.

Nonetheless, the tourney has started to pick up post India’s win against Pakistan and South Africa with more and more advertisers coming on board.

The World Cup over the years have witnessed one to two kinds of advertisers. The first set of advertisers are the ones who prepare in advance and are ready for a gamble by associating with the tourney from day one. The next set of advertisers are fence-sitters who follow the wait-and-watch approach. These advertisers only invest once India begins to play well. This year has been no different. Usually tourneys such as the World Cup gets about 10 sponsors. This year the tourney has managed to get many first-time advertisers such as Nestle, Marico, Yepme, Paytm and Raymond while Vodafone and Pepsi have now entered the game.

Undoubtedly the ICC World Cup which only takes place once in four years is a huge sports property. However, the IPL has found its own loyal set of advertisers over the years. Advertisers such as Pepsi and Vodafone have always associated with the tourney. On WC, Vodafone had to opt for spot buys due competition on TV. But both Pepsi and Vodafone started advertising on digital first, later followed it with a television campaign. Digital allowed the brands to reach out to its target consumers—the youth—by investing a smaller amount. In fact, all the ground sponsors have limited their exposures on ground only, except for Pepsi who bought just spot buys on TV during the tourney. Digital rights have been sold by Star for Rs3-5 crore. Not to forget, the shorter format of the tourney apart from the fact that most of the matches are aired in the evenings have helped in getting advertisers on board. This year during the IPL apart from regular advertisers such as confectionery brands, telecom companies and automotive companies, the e-commerce companies are expected to go for an advertising  blitzkrieg.

Star India is expected to earn R700-800 crore revenue from the World Cup this year. Its earnings will be a little more than that of SET India which earns R600-700 crore from the IPL. The deal with the public broadcaster is that of a revenue share. By sharing the feed with DD, Star is unable to command a premium on the ad rates and its revenue could be down by 8-10% because of this.

With the cost of acquisition of sports content being very high, it is but natural for a broadcaster to utilise it to its maximum potential. Star India has made the  right move by introducing several packages, right from bundling  the inventory of regional channels to selling the ad spots for highlights separately to selling the India matches as stand-alone properties. For example, the fact that Star is selling the highlights separately on its regional channels has allowed smaller retailers who do not have the money to invest in a live match to advertise on the channel.

Digital definitely plays an important role now. Given the matches are being played in Australia, the timing makes it difficult to watch all the matches. In such a scenario, people tend to go on the web to check the score and watch some of the crucial parts of the match. The digital play will allow Star to reach out to the internet and mobile population of the country. For instance, Star India’s digital platforms Hotstar and Starsports.com attracted a cumulative viewership of 25 million for the India versus Pakistan match.