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2013: A year of consolidation and localisation for sportscasters
2013 was quite a sprightly year for sports in India. Master Blaster Sachin Tendulkar bade adieu to international cricket with great fanfare in his home stadium. India won the rights to host U-17 FIFA World Cup 2017. Star India announced its decision to pump a staggering Rs 20,000 crore ( Rs 200 billion) into sports business. The entertainment conglomerate also expanded its offering by launching a new channel, Star Sports 2, in order to accommodate the ample live content it has at its disposal. However, for most sports broadcasters, 2013 was a year of consolidation and localisation.
Twenty First Century Fox’s (earlier News Corp) India sports business ESPN Software India formally merged with Star India following regulatory clearances. The ESPN brand retired from the Indian market as Star rebranded its sports network. The six channels were named Star Sports 1, Star Sports 2, Star Sports 3, Star Sports 4, Star Sports HD 1 and Star Sports HD 2.
Ten Sports wound up its Dubai office and moved its production facility to Noida. Neo Sports Broadcast sold its US operations to Willow TV to focus on the Indian market. All this while Multi Screen Media’s (MSM) Sony Six tried to remain relevant in the competitive sports broadcast market by making new acquisitions.
The year also marked the arrival of new heads at Star Sports, Ten Sports and Sony Six, with Nitin Kukreja, Rajesh Sethi and Prasana Krishnan taking charge of the respective businesses. Kukreja, who was earlier handling business development, moved to take up the challenge of driving Star India’s sports business. Rajesh Sethi moved in as CEO of Ten Sports following the exit of Atul Pande. And Prasana Krishnan, formerly Neo Sports COO, moved to establish MSM’s sportainment channel Sony Six.
On the regulatory front, the sportscasters witnessed a mixed bag of events. The Telecom Regulatory Authority of India’s (TRAI) 12-minute ad cap came into force from 1 October forcing broadcasters across the board to cut down on inventory. There was good news from the distribution side as the sector regulator ensured the completion of the Phase II of digitisation.
With the Phase II of cable TV digitisation complete and the sports channels penetrating deeper into newer markets particularly LC1, sports broadcasters decided to take a serious look at content in regional languages. Realising the potential of offering content in the vernacular, Star India launched a dedicated Hindi sports channel to boost consumption of sports content. Ten Sports also dabbled in regional feed with the India-South Africa series and the Junior Hockey World Cup.
According to Star India COO Sanjay Gupta, the successful implementation of digitisation is a blessing for sports broadcasters. “Globally, sports is the biggest driver of pay TV revenue. In India, though, that value is still to be fully exploited due to non-addressability of cable TV and the dependence on a single sport. That is poised to change as non-cricket sports are gaining traction and the analogue cable is going digital which will bring in transparency and more subscription income in the long run,” says Gupta.
The biggest gain for sports channels from digitisation is the consistency of carriage on cable TV platforms due to availability of bandwidth. In the analogue regime, due to availability of lesser frequencies, sports channels would be moved to some other frequencies when there was no big sporting event.
Gupta feels this will prove to be a game-changer as it will not only allow sportscasters to increase time spent by viewers on sports channels but also build a habit of watching sports. He rues the fact that sports content consumption is awfully low in this country.
The regional language approach
Telecasting in regional languages is part of the sportscasters’ strategy to widen the audience base “Till now, sports channels by and large are offering content only in English. We plan to change that by going regional. Last year, we launched a Hindi sports channel and the result, so far, has been encouraging. People want to consume content in their own language and sports is no different. We plan to launch more regional sports channels in Bengali, Tamil and Marathi over the next 12–18 months,” reveals Gupta.
Star has already begun its experiment in the Bengali market by airing popular local football league Calcutta Football League on its Bengali movie channel Jalsha Movie.
Ten Sports chief executive Rajesh Sethi concurs with Gupta’s views. He feels that regional feeds are an experiment worth exploring. “We are also experimenting with Hindi feed. In fact, we had a simultaneous Hindi feed for the India-South Africa series and the Junior Hockey World Cup. We also have plans to provide multi-lingual content. However, it’s still quite early to assess the impact on viewership and how it can be monetised,” he points out.
In a bid to give distribution push to its newly launched sports channel, MSM continued its experiment with Hindi feed on Sony Six for its biggest property Indian Premier League (IPL). Taking a bottom-up approach, Six went to the grass roots by organising basketball clinics in different parts of the country in order to increase participation in the sport.
Sony Six EVP and business head Prasana Krishnan says there are two clear trends in sports broadcasting, one of which is the movement towards non-cricket sports owing to the volume of such content. “Advertisers are also responding to this shift in viewership to non-cricket sports. Revenue growth in non-cricket sports is happening, but that is on a lower base,” says Krishnan.
The second trend involves increasing share of Hindi viewership, which, he says, is not a new phenomenon. He, however, acknowledges that a Hindi sports channel is a first for the industry. “Viewership for Hindi feed has grown faster for the first time than English feed; however, it is on a relatively smaller base,” he avers.
No major disruption on the acquisition front
Unlike 2012, which saw a bidding war for almost every other major property that came up for grabs, Year 2013 was marked by a lull. Star India and Ten Sports managed to retain most of their properties even as they bought new rights that suited their business. It was also a year when sportscasters made a beeline for non-cricket properties. Neo Sports Broadcast, though, was immune to this trend as it made a comeback to cricket by acquiring the New Zealand Cricket rights till 2020, in addition to renewing the deal for Asia Cup 2014.
The biggest acquisition of the year was done by Ten Sports. The sportscaster retained the Sri Lanka Cricket for $60.3 million which is $5.3 million less than what it had paid in 2008 to acquire the rights. The decline in value was due to the fact that there was no India cricket in the rights package since the rights for the sole India tour was offered to Ten Sports as compensation by the SLC irrespective of whoever won the bid.
Sony Six made the second biggest acquisition of the year as it took away the rights for UEFA Euro 2016. While the acquisition price of the property has not been disclosed, Neo Sports Broadcast, the incumbent rights holder, had paid an estimated $11 million for the UEFA Euro 2012. The sportscaster also expanded its deal with NBA to telecast 300 live regular season games, as well as NBA All-Star, Playoffs and NBA Finals.
“There was significant investment in other sports during the year. There were concrete actions taken in other sports like Star’s investment in football league with IMG Reliance. We acquired the rights for the UEFA Euro 2016 besides investing in NBA to increase its popularity,” Krishnan says.
The year also saw the rights for many properties change hands. Star India snatched the broadcast rights for the Chennai Open and Super Fight League from Ten Sports and Neo Sports respectively. In a repeat of the BCCI rights case, Star India gobbled up the Asia Cup after Neo Sports lost the rights following the termination of its sister company Nimbus Sport’s agreement with the Asian Cricket Council. Sony Six pipped Star India for the rights to the Australian Open, thereby bagging another strong non-cricket property.
While admitting that property acquisition prices have remained high, Gupta feels that ad regulation has provided the sportscasters an opportunity to up the ad rates.
“Ad regulation is a great opportunity to increase ad rates, but we have to offer good value to the advertisers. It is also good for consumers since they don’t have to watch too many ads. The time spent on watching content will also increase which will help broadcasters to increases rates,” asserts Gupta.
Moving away from the traditional concept of just acquiring broadcast rights, Star India formed a joint venture with IMG Reliance to launch a football league, Indian Super League (ISL). Having a 35 per cent stake in the JV, Star will invest Rs 20 billion in the league. The investment will give Star a say in the management of the league.
IPL stays ahead
One property that the advertisers afford not to miss is the Indian Premier League (IPL) . Despite being in the news for all the wrong reasons, it continued to perform solidly both on viewership as well as on revenue. MSM is believed to have raked in advertising revenue of Rs 9.5 billion from the sixth edition of the tournament.
Rupee depreciation hurts
Ten Sports’ Sethi emphasises that while the acquisition prices did not go through the roof, the sportscasters felt the pinch due to rupee depreciation vis-à-vis the dollar. “While there was not much inflation in prices of buying properties, the dollar-versus-rupee fluctuation made an impact as our payouts increased,” reveals Sethi.
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