Cricket matlab Star India!!

With Star paying a premium to get cricket monopoly, will viewers and advertisers pay the price now?

e4m by Venkata Susmita Biswas and Abhinn Shreshtha
Updated: Sep 5, 2017 7:42 AM

Cricket has one destination for now: Star India. With its Monday win, Star India has the rights to broadcast all the matches played under the aegis of ICC, IPL and BCCI (through 2018). Star India’s focus on cricket led to the company outbidding competitors by a large margin leaving everyone wondering how it will recover the staggering Rs 16,347.5 cr.


Sony Pictures Networks that was home to IPL for ten years will continue to hold the broadcast rights for international cricket in Pakistan, South Africa, Sri Lanka, West Indies, Zimbabwe and Caribbean Premier League. Even though the network has the rights for other significant sporting events like the Commonwealth Games and Australian Open, it is cricket that brings in the moolah. In addition to these, Sony owns the broadcast rights for FIFA. Football being a reasonably popular sport in India, the network will have to cash in on this sport and FIFA to rake in earnings.


This skewing of cricket broadcasting rights towards Star India had raised a debate about the monopolisation of the sport by one network. Calling it a complete monopoly of the most popular sport in India, Anup Chandrasekharan. Business Head at Colors Tamil, said, “This monopoly is very worrisome.” This worry stems from the forbearance that a monopoly does not prove to be healthy for the market. He also felt that Star India as an organisation is making a drastic shift in focus from entertainment to sports. 


Echoing a similar thought, Dinesh Vyas, Associate VP(Planning) at OMD, said, “This is a culmination of Star's long-term vision that started a decade ago. They have developed sports as a genre which, even if it does not compare to GEC, it can at least stand on its own.”  


This monopoly need not necessarily be a bad thing. Calling this move by Star India a game changer for all media properties, “This shake-up was supposed to happen. It is good that Star has taken a lead and bid so high. This sets the benchmark for the next 5–10 years,” said Pawan Jailkhani, Chief Revenue Officer at 9X Media. 


Some believe that a monopoly such as this has the potential to lead to market growth. “In my point of view it is a good thing for one broadcaster to have this much clout as this will only help the market become bigger. Media planners and brands have been driving down rates for the past 15–20 years and so this would change which would help the market,” said Sandeep Goyal, Vice Chairman of Mogae Group.



Ad Rates


The expectation from the industry is that Star India is set to change how the game is played here in India. The speculation at this point is that Star India will hike ad rates for multiple reasons. A monopoly of this kind will impact ad rates, said Shekhar Banerjee, COO at Madison Media. “At the heart of any ad spend is marketing and RoI should make sense for an advertiser. If it does not make sense then obviously people will back out,” he added. 


This hike in rates will not be restricted to sports alone and is expected to impact the entire spectrum of television advertising. “This will change the overall CPRP game in the industry - not just IPL CPRP, but overall television CPRP. And this change is necessary for the Indian market because it is extremely undervalued,” said Jailkhani. 


Star will also increase ad rates to extract a significant ROI. “There are brands like Havell and Kent RO that have built their entire brand image by marketing exclusively on sports. Star will definitely milk it. We can expect an increase in rates,” Vyas said. “Advertisers who have already been keeping up with Sony’s year-on-year increase in ad rates will be prepared to respond to Star’s hikes,” said N Chandramouli, CEO Trust Research Agency. 


Noting that the sum of money that Star India has pledged for the IPL was high and a bit unexpected, Ashish Bhasin, Chairman & CEO South Asia Dentsu Aegis Network, said, “While the IPL has huge potential for advertising since it appeals to all demographics, there is a limit to which the market can bear an increase in rates. I am not sure how much this will result in an increase in rates.''


Vyas added, “However, I am sure that they understand that brands may not be ready to go above a certain amount. What I think this does is it gives Star a lot of options in sports. They can offer advertisers the choice of spreading ad budgets over different sport properties or cricketing events.”


This shake-up of the ecosystem has also put people on the wait and watch mode. Because the question of the hour according to Chandrasekharan is, “You have paid a premium to win the bid, but will viewers and advertisers pay a premium too?”

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