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FICCI Frames Day 3: Spotlight on marketing in sports broadcasting

Broadcasters have to take a close look at formats and ways to make sports properties more compelling for viewers 

BestMediaInfo Bureau | Mumbai | March 15, 2013

(L-R) Sundar Raman, CEO, IPL, Prasana Krishnan, COO, Neo Sports, Harsha Bhogle, Sports Commentator, Venu Nair,Head-South Asia,World Sports Group, Kushal Das, Secretary General, All India Football Federation, Nitin Kukreja, President, Star India Pvt. Ltd.

The third day of FICCI Frames 2013 saw some of the key stalwarts of the business of sports and sports broadcasting industry come together to touch upon one of the biggest problems currently plaguing sports broadcasting in India. The session ‘Sports: Economic viability and the crisis within’ deliberated on the deep seated hurdles plaguing the business of sports because of a lack of direction to plunge ahead. With a regime beset with escalating costs, restricted prices and little IP protection, offering compelling content to Indian viewers remains a challenge.

The panel consisted of Sundar Raman, CEO, IPL; Kushal Das, Secretary General, All India Football Federation; Prasana Krishnan, COO, Neo Sports; Venu Nair, Head - South Asia, World Sports Group; and Nitin Kukreja, President, Star India.  The session was moderated by well-known cricket commentator Harsha Bhogle.

The initial part of the session stressed on some of the most common issues faced by broadcasters – the battle of Cost vs Revenue. The panellists debated whether revenue is keeping pace with cost of sports properties and whether they are viable. The session also touched on how broadcasters fair between airing cricket and non-cricket sports which are still developing in India.

Initiating the discussion, Nitin Kukreja said that over Rs 38.5 billion had been committed over the last six years to acquire the rights to Indian cricket. He said, “I think the challenges on the revenue part are manifold and are present in almost every field. The advertiser is always looking for continuous stream of content that he can count on for viewership. It’s the nature of the game, the format, the schedules which are different for sports, hence influencing habit formation, and therefore to get a consistent stream of advertising is a challenge. On the distribution front, the regulatory environment for sports is such that the catch-up doesn’t happen and each step is a struggle. Also, if you look at price caps every genre of content is treated similarly, whether entertainment or sport or news. Any sport is bucketed together irrespective of viewership, so once again distribution has become a challenge and even monetising a new form of content is a struggle because technology has emerged at a faster pace than regulation. The revenue stream is difficult to unlock in the value space.”

Prasana Krishnan said, “The reality is that the revenue stream is still a little slow to catch up. The revenue streams are still not ramping up to costs. The DTH explosion has been slow and has not taken place at the rate we were expecting to. So you can say that the basic challenge is the cost structure, as it is slight above what is justifiable in the market at this point of time.

The next phase of the session stressed that when rights are being purchased, broadcasters are fully aware of the environment and are therefore making rational choices. Venu Nair said, “Most people who bid for the rights, bid on basis on data which they think will come up to performance. The question is whether it can be recouped. The point is that unless you don’t bid on a cost that is unreasonable, you will not chase on its revenues. I believe that in this industry, like in real estate, there is a price to every value point. If you can decide on a value point and stick to that, then you have a chance to make money.”

Taking a look on the positive side, Sundar Raman said, “I personally don’t think there is a crisis as stated for cricket or for any other sport. There is a lack of opportunity in the industry and issues which need to be addressed. Today the amount of money that you notice in markets such as the UK, the USA, South Africa or even Australia that a broadcaster gets paid is from subscription revenue. One of the major points broadcasters should look at is understanding the market size they exist in. Once you are on track with that and recognise it you can understand the potential of revenue.”

India now is getting influenced with the western world and is opening up to sports outside the world of cricket. The challenge is to develop these sports in the Indian environment where cricket is so strongly rooted. Kushal Das stated, “The problem with football in India is football itself. You have every professional football league broadcasted across channels, but if you compare the Indian league with other world class leagues, you will see that it is not compelling. The challenge is to develop football as a compelling product through talent development and infrastructural improvements.”

Sundar Raman said a lack of marketing was repsonisble to some extent on the state of affairs. He said, “Every sport needs to be marketed. Every sport has a huge potential to be marketed in India. How well are stakeholders recognising the property? Cricket is an advertiser and commercial friendly sport, it has a break after every over, but if you look at football, it has only two breaks in the entire game. So, it doesn’t have the same sense of commercial flow and hence loses out on marketing. Formats shouldn’t be altered as to go commercially but should stick to its growth.”

However, the panellists agreed that every sport in India cannot follow the IPL format. Different sports have their own commercial properties and qualities and will work at a particular moment in the market only when the audiences have matured to it and have a local connect to it. It cannot be a case of one size fits all. Success for any development will only come through long term commitment that will rely on price stabilization, digitization, familiarity and support.

To summarize the discussion, Harsha Bhogle stated that the industry is still at a crucial stage where sports broadcasters are trying to balance and justify their rationale of purchasing sports rights in the country, brace for developments into non-cricket sports and look forward to the digitisation boom. All broadcasters can do is hope for a positive outlook in a country where you first buy then negotiate.

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