Many had their doubts whether STAR India’s Rs 3851 crore gamble on cricket, for the broadcast and digital rights of BCCI (Board of Control for Cricket in India) matches from 2012 to 2018, would pay off.
Some highlighted that the calculated risk may deliver better than expected because digitisation would be a reality in India beginning 2012. This alone should enable STAR to monetise cricket better than most other media companies that have dabbled in this space in the last few years. Others just “hoped” that STAR India was not dependent on ad sales alone to ensure it makes over Rs 32 crore per match in the initial two years and then Rs 43 crore per match in the remaining four years.
But BCCI’s decision to resume cricket ties with Pakistan, after a period of five years, has turned out be a beneficial call in STAR’s favour.
India will play Pakistan in three ODIs (One Day Internationals) and two T20 matches from December 2012 to January 2013. “This has been a long awaited one,” said Dinesh Rathore, COO, Madison Media Group, explaining that while each series commands its own price, this one had the potential to demand quite a price.
For this series, a lot of STAR’s dependence would be on advertising sales. At present, almost 70-80 per cent of cricket revenues for a broadcaster come from advertising sales. But as the sunset date, which has been postponed to November 2012, on analogue distribution in the four metros – Mumbai, Delhi, Kolkata and Chennai – becomes a reality, the expectation of full reporting of the households in these cities, and the consequent subscription revenue, becomes an important factor.
STAR also has the digital rights for the BCCI matches for the next six years. This can be another area, where the company could work towards monetising online viewership.
Lodestar UM’s COO Anamika Mehta is of the opinion that India-Pakistan series is already hyped and there is excitement amongst viewers. “The channel would definitely try to capitalise on this and hence the entry costs for the advertisers would be on a higher side as compared to an India-Australia match or an India-England match,” she added.
Mehta was quick to point out that even with a higher entry price, the RoI (Return on Investment) may not necessarily be effective enough. While STAR does bring in Network clout and media reports suggest that the channel is expected to raise Rs 100 crore in ad revenues, it still remains to be seen how the series pans out on that front by the end of the year.
Source: Exchange 4 Media