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Thoughts on IPL Media Rights, a week after
By Indrani Sen
Last week, on June 14, 2022, the final results of the e-auction conducted by the Board of Control for Cricket in India (BCCI) were declared with the Board earning a whopping Rs 48,390 crore for all the packages offered by them for auction. The amount is almost three times of Rs 16,376.5 crore, the money which Star India paid for TV and Digital media rights for the 2017-2022 cycle. This has made IPL the second most valued sports league in the world, next to America’s National Football League pushing English Premier League to the third position.
By now everyone knows that this time Disney Star India has won only Package A containing telecast rights (India sub-continent) for next five years 2023-27 by bidding Rs. 23,575 crore. Viacom18 has bagged Package B containing digital rights (India subcontinent), Package C containing digital rights of 18 matches per season and part of Package D containing media rights (both TV and digital) for three global regions, Australia + New Zealand, the UK and South Africa, the main cricket playing countries whose players have been regularly participating in the IPL tournament. There is some confusion in the market related to the total payment of Rs.23,758 crores made by Viacom 18 to BCCI as lot of people have concluded that the amount has only been paid for the domestic digital rights whereas Viacom18 actually paid Rs 20,500 crore for the domestic digital rights. The media rights for the balance global regions have been won by Times Internet.
Lalit Modi has been getting lot of coverage related to IPL media rights auction this time as cricket historian and author Boria Majumdar timed the release of his book on Lalit Modi “Maverick Commissioner” last week right after the announcement of the winners of IPL’s e-auction for media rights for 2023- 2027. Majumdar also announced that his book will soon be made into a film. Suddenly. media channels are busy interviewing Lalit Modi who is having a field day. At the time of writing, I read his interview on www.mykhel.com where he has said that BCCI should make it mandatory for all IPL franchises to own a women’s team in order to start a Women’s IPL in India. Last week, in an interview to NDTV Sports, he said that value of media rights will double again in next cycle as IPL viewership is probably the highest in the world in terms of people watching the matches (https://sports.ndtv.com/ipl-2022/ipl-viewership-probably-highest-in-the-world-lalit-modi-to-ndtv-3079226 ).
While the Indian M&E industry is still struggling with its overall growth after the pandemic, one wonders from where the growth in the value of IPL media rights will happen? According to the EY FICCI report 2022, digital advertising grew by 29% in 2021 and TV advertising grew by 25% in 2021 which was still slightly short of the pre-Covid 2019 level. TV subscriptions continued to fall in 2021 for the second consecutive year. In the last few weeks of IPL, there was a sharp fall in the TV viewership which had raised doubts about the base rates fixed by BCCI for the e-auction. If any particular media property grows at a much higher rate than the market average for a certain period, it does so at the cost of other media properties in the same media bucket which cannot be sustained in the long run. Only time will tell if the value of IPL media rights based on the current e-auction will be actually attained.
Back in 2016, when Star India won the TV and Digital rights for IPL (2017-2023), a lot of doubts were raised about the possibility of their success in achieving the targets. This time, industry people are speculating more about the winning bid of Rs 20,500 made by Viacom 18 for the digital rights and the implications of TV and digital rights going to two different organisations. The Reliance-backed Viacom18 seems to have played its cards well based most likely on a deep-routed strategy for increasing their market share in online video viewing backed by the huge share of Jio in the telecom market. The introduction of 5G is expected to change consumers’ choice for live viewership of sports events from TV to mobile during this 2023-2027 cycle.
According to an article by Javed Farooqui on Exchange4media on May 7, 2022, London-based Omdia’s recently published report on online video viewing trends shows that in India Disney+Hotstar leads the chart with 41% share. The article also shared the following graphic from the research.
Disney+ Hotstar’s subscription base tripled during pandemic years from 8 million to around 25 million by the end-2020, thanks mostly to IPL’s coverage and the competitive pricing of its annual plan. Omdia believes Disney+ Hotstar will continue to lead the standalone subscription online video market. The same report estimated that online video-on-demand (VOD) subscription market in India reached a value of $639 million in 2020, up by 142% from 2019. Disney+ Hotstar and Netflix together accounted for 78% of the total online video subscription market.
ViacomI8 may be planning to revive Voot with this bid for digital media rights of IPL and may be also ready to write off losses, if any, as part of marketing cost for promoting Voot. With 41% marketshare, Disney+Hotstar was not required to invest proportionately high amount in winning the digital rights of the IPL. On the other hand, Disney Star India has a greater need to protect its turfs in the various TV genres where competition is much stronger.
