Is IPL hitting sixes over GEC revenues?

Is IPL affecting the top line of GECs? At least Q1 every fiscal marks a shift in viewership & advertising trends. e4m decodes...

e4m by Abhinav Trivedi
Updated: Apr 22, 2013 7:34 PM
Is IPL hitting sixes over GEC revenues?

By its very own nature, television is contagious. The aired programmes, if hit, spread like wildfire. Of late, the cricket extravaganza ‘Indian premier League’ has hit the tube and taken it on a roller coaster ride. According to experts, in the last six years, IPL has been creating a hole in the balance sheets of the other Indian entertainment broadcasters, at least in Q1 every year.

The format, positioning and the serving of the IPL is perfect blend of entertainment and sports and grabs majority of eyeballs. The second week ratings (during IPL) by TAM have revealed that Set Max, the official broadcaster of the IPL has come to number two position with 234 GRPs, displacing prominent GECs such as Colors, Sony, and Zee.

Are GECs really losing out to IPL? “Of course, they are,” said PM Balakrishna, COO, Allied Media. He further added, “It is a proven fact every year.  Not only GECs, all the genres are affected.  Prime time viewership of IPL is high and advertisers spend too much money to capitalise the platform and evangelise their brand equity. The ratings too of the format are good; therefore to be precise, viewership and revenue of GECs are affected.”

Sonal Dabral, Chairman and Chief Creative Officer, DDB Mudra agreed, “Historically, there is always a 10-15 per cent drop in the viewership and revenues of the GECs during IPL. But this is a short-term affect and will settle down once IPL is over. The loyal viewers of the channel get back and the affect is therefore neutralised in the other quarters.”

It is reported that IPL has attracted almost Rs 987 crore of advertising budgets for this fiscal. The prime time ratings are high and brands do not want to be left out when it comes to gaining attention of the consumers.

Ajit Varghese, MD-South Asia, Maxus India, explained the numbers. “The annual advertising budget for this fiscal is expected to be Rs 12000 crore. If we take the first quarter into consideration the number would come down to Rs 3000 crore. Now if IPL takes in Rs 1000 crore in the same quarter, then the share left for GECs would be Rs 2000 crore. That is a straight loss of almost 33 per cent – an approximate amount. Every year, GECs lose most 25 per cent viewership and more than 20 per cent in revenues in the first quarter (approx).”

The other side
But is it all downhill for GECs in Q1? Should Q1 be zero investment in content for channels? Anindya Ray, VP – Lodestar UM, disagreed. “It is true that IPL is a known factor and when it comes to branding, advertisers prefer the property. But one must understand that the tournament season lasts only for two months. What about the rest of the year and the remaining one month of the quarter? There could be a little shifting in the allocation of the advertising budget, therefore only the seasonality of the spends change, the allocation does not. The amount of money which has to be invested on GECs remains intact. Only the Q1 spends are confined to IPL mostly.”

He further added, “Even on the content side, since most homes in India are single TV homes, prime time slot might go to IPL, but one should not forget that the repeat telecast of the other prime time programmes ensures that the content is not overlooked. People who have missed the programme in the night might hook onto the repeat telecast of the programme. Either late night or in the afternoon next day, the content is watched! One should not get carried away with the ratings. It is only the short-term impact. Strong channels will continue being strong, no matter what!”

Sanjoy Chakrabarthy, MD, Zenith Optimedia said, “GECs and IPL would co-exist and there is no question of GECs losing out to IPL. After two months, the scenario would be back to normal. Earlier, a movie release used to be postponed due to IPL, but now that trend has taken a back step. One should not get carried away with the hype. IPL is a hit and the GECs do face the pressure, but the market is currently in expansion mode and it is only the shift in timing of spends, not the spends.”

Star Plus, a big advertiser on IPL this season has not only managed to mark its presence in every match of the tournament but has also been ahead of Set Max on the parameter of ratings. Nikhil Madhok, VP – Marketing, Star India said. “Both, digitisation process and IPL are co-existing together. Digitisation Phase II deadline was March 31 and IPL commenced on April 3. Therefore, it is difficult to measure the impact. Fluctuation in the data exists and one cannot clearly say that GECs are losing out to IPL. But the overall rating of IPL has declined this year. One cannot firmly argue that IPL is a winner here.”

Star Pus is the only channel that has consistently been ahead of Max during this season of IPL so far. On the leadership of Star Plus, Madhok added, “It is a good time for us. This is the first time Star has maintained the number one spot even during IPL. Earlier we used to be displaced during the IPL season, but this time we have maintained our leadership.”

The way forward
IPL, therefore, has made its impact in a big way. But as Madhok mentioned, digitisation Phase II is underway and it is difficult to measure the exact impact of the cricket bonanza on GECs. The tournament has affected GECs. Loss could be in terms of revenue or viewership, but there is no denying the fact that at least in the short term of Q1, GECs come under pressure and face the heat of the sixes on the ground.

But GECs are all set to take the IPL challenge in their own way as they feel that IPL is big enough to compete with them but not big enough to displace them. When IPL commenced, GECs saw a big dip in their ratings, but with time GECs have taken the challenge in their own stride.

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