We will break even this year itself: Sanjay Gupta, MD, Star India
Star won the IPL telecast rights from BCCI in September 2017 at a whopping price of Rs 16,347.5 crore. Most experts predicted that the network would take two to three years to break even the cost
If you are from the ad world, you, in last six months, would have surely wanted to find answer to this one question— when and how will Star India break even the cost it has paid to buy IPL?
Amid much hype, Star won the IPL telecast rights from BCCI in September 2017 at a whopping price of Rs 16,347.5 crore. While most experts predicted that the network would take two to three years to break even the cost, the man sitting at the helm is not ready to wait that long.
“We will break even this year itself,” says Sanjay Gupta, managing director of Star India.
Gupta attributes this confidence to the big jump in ad revenue that the broadcaster is claiming to have achieved, much early in the season.
“We have sold TV and digital together. This year, we will do a turnover of Rs 2000 crore. Last year, the total was Rs 1200 crore, which included TV and digital. So we are looking at roughly a 60% advertising growth this year,” Gupta says.
Talking about the increase in ad rates this year, Gupta doesn’t hesitate a bit in saying that “good things come at a good price.” Despite the high price, the overall national demand was so huge that the network has been running full for the last two weeks with almost no space to take more, claims Gupta. “We have very little inventory unsold for next few weeks,” he adds.
According to Gupta, the advertisers who have invested in IPL believe that the league will surely give them value for money. And the growth that these brands will experience after IPL will only reaffirm this faith in IPL.
This is the first time that IPL has entered regional markets-- Tamil Nadu, West Bengal, Andhra Pradesh and Karnataka-- and Gupta is quite positive about the performance in these markets.
“Our regional feeds are doing extremely well. Until last year, we only had feeds in Hindi and English but a lot of advertisers these days do regional ads and these feeds are helping brands to talk separately to each of these markets.
However, we did not get time to reach out to exclusive regional players this year. This is one area we will explore more next year.”
The Rs 2,000 crore turnover that the network is claiming is only the ad revenue. Apart from this, the broadcaster has already put live matches on paid channels and hiked its distribution cost ahead of the league. While market sources claim Star sought a hike of up to 40 per cent, the broadcaster says it was ‘reasonable and nominal’.
“When it comes to distribution strategy, we believe that sports should be made available to every consumer in the country. Sport, especially cricket, has mass consumption. So the strategy is to make cricket available easily at low price and then have specialised fan-based content, which will be available at a higher price for those who are ready to pay.”
Gupta said the network wants cricket to reach more and more people and would like to contribute towards it.
“We may consider putting semi-finals or finals on Star Gold. But largely our strategy has been to make it available on Star Sports and take this channel deeper to every consumer,” Gupta says.
Gupta is also excited about various marketing innovations that the broadcaster has introduced this season. “In the digital domain, in terms of performance advertising, we have introduced many new features. For example you can order a pizza through Dominos while you watch a match or order food on Swiggy, which is advertising a lot with us this year.”
Another such much-talked-about technological addition is Adserve on Hotstar. Gupta says the tool will be very helpful for advertisers, especially those in small and far-off cities.
“As we start leveraging Adserve, the number of advertisers will grow. This is the very first attempt. It will become better and better over the next few quarters. In future, we will make technology platforms very customer centric for the advertiser to leverage the best value.”
“Overall, I feel advertisers will see a lot of value for the money that they are putting in,” he says.
The broadcaster is also positive about the growth of cricket in India and Gupta feels that IPL, with its huge popularity, can be the driver of this growth.
“As of now, the average consumption of cricket is five minutes a day. If you go to markets like Asia, America or Europe, sports is consumed 45 minutes a day per consumer. So we have a huge headroom for growth,” he says.
“I think sports, especially cricket, consumption will grow dramatically over the next 10 years. And if cricket grows, IPL will be the driver of this growth because it is the easiest to watch. IPL is a very good tool to keep the power of cricket growing in this country. From the business point of view, IPL is the best tournament to own and build,” he says.
Talking about the challenges that the network has faced so far, Gupta said one of the biggest challenge was how to make something as big as IPL even bigger and give brands value for money? He has the answer.
“It is important to talk about two things, one is what have we done in IPL that makes us confident about what the outcome would be and second is how to look at this outcome. Let’s look at the three things that we have done in IPL this year. One we have made cricket the core of IPL in terms of the feeds, like if you look at the Superfan feeds, the dugout initiative and best vs best.”
“It is all about cricket and cricketers being the heroes and rest of the world just saluting them,” he concludes.
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