Sports18 Khel on DD FreeDish: Viacom18 testing the waters before IPL bid?
Experts feel launching the channel on the FTA platform may be a tactical move by the network to initiate a dialogue with advertisers
Within days of launching its first dedicated sports channel Sports18, Viacom18 has launched another sports channel, this time on free-to-air (FTA) platform DD FreeDish. The network has shared that Sports18 Khel will offer content relevant to the FTA viewers across a range of sports in Hindi. “This is also an opportunity to funnel a new audience to the Pay TV segment. Viacom18 secured a slot on DD FreeDish to make sports content easily accessible and expand the consumption of the genre across a wider audience,” read a statement from the network.
With a reach of more than 43 million households, DD FreeDish is the largest DTH platform in the country, allowing any channel to not only reach its audience but also increase advertising revenue. However, sports is perceived as a premium content, so, what is Viacom18’s long-term strategy behind launching a sports channel on DD FreeDish?
According to Sandeep Goyal, Managing Director of Rediffusion, this is basically testing the ground for the bid to the BCCI tender for IPL. "They don't have a sports portfolio, so this is just a window into sports and a way to communicate with clients and brands. The advantage of being on DD FreeDish is the massive reach it provides in terms of numbers. This step could have been taken to establish a reputation with the brands. This, to me, looks more of a tactical move to initiate a dialogue with advertisers."
Sports18 Khel will allow viewers to watch games in Hindi, including the highlights of 2021-22 NBA season, Abu Dhabi T10 League, Road Safety World Series, and Santosh Trophy.
Karan Taurani, SVP, Elara Capital, shared that sports is one of the most premium forms of content, and it's difficult to rely solely on advertising revenue. “The television industry is composed of 55 per cent subscription and 45 per cent advertising revenue. GEC and sports account for a significant portion of this 55 per cent because they are the most consumed categories in terms of where people pay for content on TV. People do not pay for news or other specialised categories or channels.”
Taurani added that this could be a strategy to test a large number of viewers for a channel in the early months, and then once they have a sizable base, they can try the pay model. “In long term, it may not be possible to run it solely on advertising revenue because it is not economically feasible in terms of content cost. However, in the medium term, it may be converted to a pay channel. Any new channel gaining traction on TV today is a challenge, so rather than spending money on marketing, this is a very effective strategy in which content is provided to customers for free.”
Talking about content, Taurani mentioned that they need to have compelling content (IPL or other big property) in order to attract eyeballs. “If a channel adopts a subscription-based model before and prices it similarly to other channels in the genre, it may be unable to attract those eyeballs, resulting in a loss of ad revenue. This is just a test strategy before making a decision.”
Channels on DD FreeDish are required to pay an annual fee. But they unlock a large number of subscribers, though not highly paying ones but a significant number, which pushes advertising revenue. So, from that standpoint, Nitin Menon, Co-founders of NV Capital, believes that using DD FreeDish to increase advertising revenue isn't a bad idea.
“Rather than focusing on subscription, it could be a strategy to get a significantly larger number of viewers, which could be helpful for advertising revenue. One must be aware that, after the onslaught of OTT, subscription revenue could be plateauing most likely because people bundling services here and there may face some difficulty. However, I would not say the same thing about advertising revenue. When it comes to broadcasting, advertising revenue is still strong. And, of course, I assumed there would be some digital play. As a result, digital subscriptions and advertising are more likely to appeal to them. Experimenting with the DD FreeDish model for broadcasting may be worthwhile,” Menon said.
He also added that with the advent of OTT platforms, subscription is not what it used to be four or five years ago. Things will change with the arrival of NTO 2.0. “They might have done a cost-benefit analysis to see if it's worth to build the infrastructure only around subscription revenue.”
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