Sports among top 3 genres watched on TV & OTT: KPMG & FIFS report

The report shared key insights into the fantasy sports landscape in India, its economic impact and future in a post-COVID world

e4m by exchange4media Staff
Updated: Jul 9, 2020 5:04 PM

KPMG in collaboration with Federation of Indian Fantasy Sports (FIFS ) presents a study on the business of fantasy sports. The report offers key insights into the fantasy sports landscape in India, its economic impact, the impact of COVID- 19 on Indian online fantasy sports (OFS)  and the way forward for this space. 

The Indian Online fantasy sports (OFS) space has come a long way from its nascent stage in 2016 -17. 

Below are the key highlights and here is the link to view the largest online fantasy sports conference in India - GamePlan 2020 LIVE LINK:

  • Launch of new fantasy sports platforms: From less than 10 operators in 2016 to 140 + operators  at the end of 2019
  • A high degree of adoptions by sports fans: The fantasy sport user base grew from 2 million in 2016 to 90 million in 2019
  • While COVID-19 is likely to slow down the rapid growth in user base and engagement, the fundamentals of the business remain robust enough to experience a V shaped recovery, once sports leagues resumes worldwide
    • The recent developments around relaxation of lockdowns in many global economies has meant that popular European leagues like the Bundesliga (Football) have already commenced in May 2020, while others like the English Premier League (Football), Serie A (Football) and La Liga (Football) have already resumed in June 2020. Additionally, UEFA has announced dates for European competitions, International cricket in England, Cricket leagues in Sri Lanka, West Indies and across Europe are set to begin or have begun, signaling a steady momentum towards resuming OFS engagement
  • Increasing competition, high customer acquisition costs, innovative offerings by well-funded market leaders to acquire and retain users, coupled with business impact of COVID-19 is likely to result in a certain degree of market consolidation in the near to medium term
  • The top four-five players account for ~95 per cent of the market share of the industry
  • Growth in digital infrastructure ( Internet and Smartphone penetration), increase in digital transitions via payment wallets and UPI, growing popularity of sports leagues, operator investments in technology and focus on gameplay and reaffirmation of the legality of the fantasy sports format in India  are some of the growth drivers for this space
  • The OFS market clocked Contest Entry Amount (CEA) of over INR 6,000 crore in FY 19 and more than doubled to INR ~16,500 crore in FY 20 at a growth rate of ~167 per cent between FY1 and FY20
    • The growth in FY20 is despite COVID-19's impact on loss of CEA and revenues for the last 15 days of March 2020
  • Key Challenges faced by the OFS Space -High dependency on Cricket, Seasonality, Consumer Perception of OFS being a game of skill, low entry barriers, play store listing limitation and low women participation
  • COVID-19 had a direct on the revenue streams of OFS platforms and ensuring user engagement emerged as a key challenge; incumbents proactively undertook initiatives such as expansion into new leagues that were ongoing and introduction of other skill based games like quizzing to continue momentum on the platforms
    • Additionally despite the blip in the revenues during locked-down, none of the leading OFS operators have reduced their organization size
  • The OFS market though still in an emerging state has been contributing significantly to the Indian economy, both directly and indirectly
    • The direct impact stems from revenue and employment generated by the OFS operators and the pay-outs to the exchequer in terms of taxes
    • The indirect impact is via the multiplier effect on both upstream and downstream ancillary industries operating in the OFS ecosystem, including payment gateways, advertising platforms & agencies, tech-vendors, and other service providers both for the OFS platforms and users
    • The industry generated direct private sector revenue of ~INR 2,500 Cr and indirectly ~2,600 Cr for the ancillary industries, while generating ~3,400 direct and over 5,000 indirect employment
  • KPMG in India conducted a dipstick survey of 763 respondents across 10 cities, of these 253 were OFS users (having played OFS in the last 1 year) and the rest were categorized as non-OFS users
    • Overall 65% of the respondents indicated Sports was among the top 3 genres they watched on TV & OTT platforms
    • ~90% OFS users indicated Sports to be one of the Top 3 genres they watched on TV & OTT platforms vis-à-vis 49% for non-OFS users
    • ~32% of the total respondents indicated that they engage with more than 1 sport on the OFS platforms; incentivizing operators to expand their sports offerings
    • ~55% of the users mentioned that their engagement with sports leagues increased once they started playing OFS
    • Over 65% of these respondents indicated that there is a direct increase in the time spent in analyzing, watching and reading about the Sport once they start playing fantasy sports online
  • Lastly increased growth and popularity of the OFS platforms is likely to translate to an overall growth of the OFS ecosystem -including analytics, content, digital transactions etc. 

Commenting on the study, Girish Menon, Partner and Head, Media and Entertainment, KPMG in India said “Online fantasy sports in India has seen a rapid growth, reaching a revenue size of INR 2,470 crore in FY20. This growth has also contributed immensely to the overall ecosystem around fantasy sports including online payment platforms, tech vendors, data analytics, etc. and has had a positive impact on the consumption and growth of the overall sports landscape in India. While COVID-19 may result in a temporary blip in the upward trajectory of the fantasy sports segment, the medium to long term growth prospects of the segment remain robust, with the gradual return of international sport. Further, in a post COVID world, with social distancing measures in place, fantasy sports is likely to play an increasingly important role in connecting fans to their favorite sports and increasing fan engagement.”

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