Star India may have raked in at least Rs 3,000 crore through the broadcast of season 11 of the Indian Premier League (IPL), early estimates suggest.
The broadcaster had bagged the broadcasting rights (2018-2022) of the premier cricket league across platforms for five years for more than Rs 16,000 crore.
The total earnings of Star India through IPL were more than 35% of what the previous broadcaster Sony earned for the 2017 season.
The market estimates suggest that the advertising revenues for IPL 11 would have contributed close to Rs 1,800 crore, while about Rs 600 crore would have come from distribution. The revenues from international markets would have been close to another Rs 600 crore, considering that it had international digital streaming rights too.
The advertising revenues are estimated to be split between television (Rs 1,500 crore) and Hotstar, the digital platform, which would have earned about Rs 300 crore. The broadcaster was able to sell a 10-second advertising spot on TV for more than Rs 10 lakh.
Sony Entertainment Television claimed to have earned over Rs 1,300 crore advertising revenues in the 10th season of IPL. Sony had clocked about Rs 500 crore from distribution during IPL 10. The international revenues earned by Sony were in the range of Rs 400 crore. The total revenue was around Rs 2,200 crore.
“If you compare to IPL10, the season that has just ended has done a phenomenal job in terms of distribution revenues, majorly because of the sports cluster and before the IPL started, of which they got close to 15-20% hike from mid-sized MSOs and close to 10% from the bigger players. Technically, Star can even allocate 15% of their total distribution revenue this year to IPL. So that can even be 15% of Rs 4,000 crore, but all of that might not necessarily be from IPL. Also, on account of IPL, the network might have got a marginal raise in its distribution revenues, nothing significant,” said an industry observer.
Another expert in the distribution strategy said, “The kind of jump that the subscription of Star Sports cluster has seen could have been more. Sports clusters are any day more expensive than the movie channels and Star had expected to attract huge subscriptions, which still has scope to grow. Also, as far as prices of the distribution deals are concerned, Star couldn’t do much with major players such as Tata Sky since the existing deals included IPL 2018.”
The network earned close to Rs 3,000 crore as total distribution revenues for the year 2017.
Coming to the advertising revenues, BestMediaInfo on two different instances had analysed the advertising sales efforts of Star. IPL 11: Are advertisers getting the bang for their buck? and IPL 11: Star India’s regional play sans regional advertisers.
A FMCG major said, “We didn’t buy much on IPL, rather, there were spot buys in last 8-10 matches and that’s about it. In fact, we bought the finals at an ad rate of Rs 18-20 lakh per ten seconds.”
Another advertiser said that he hasn’t paid anything more than Rs 9 lakh for the same slot. The beauty with ad rates is that nobody but the broadcaster knows the average and effective rates. Each agency, or rather each planner, buys the ad slots at different rates for different buyers, depending on the need, plan, product category and volumes of slots.
While a lot of planners, buyers and advertisers have quoted different figures for the tournament’s ad rates this year, there is a simple math that one of the leading advertisers on IPL 11 explained. “There are about 2,500 advertising seconds in one IPL match, which means that there are about 14,750 ad slots of 10 seconds each across 59 matches of IPL 11 (one match was a washout). Even if you consider that Star has made close to Rs 1,500 crore on IPL on TV, it means that one ad slot was sold at an average of Rs 10.84 lakh. Even if one considers the non-live programming and the ad revenue did that earning, the ad rates of live matches would still be anything around Rs 8-9 lakh per slot.”
Having said this, it must be noted that Star India brought out some of the first-of-its-kind innovations in terms of programming and content. Be it the Select Dugout on Star Sports Select or the Watch’NPlay on Hotstar, the efforts on programming have been well appreciated. The network brought 100 commentators on the tournament across all the six/ eight languages that it telecast the IPL.
Watch’NPlay, a first for a cricket game, allowed users to win prizes by answering questions based on cricket. The grand prize for each match was the Mahindra KUV100 NXT and winners across towns like Kota, Rewari and Jaunpur have won the cars. A total of 2.1 billion questions were answered throughout the season on IPL’s Watch’NPlay.
The last leg to analyse for IPL 11 is the marketing stunt. Taking a huge step by trying to make IPL a sports property, many people in the industry have expressed the view that Star India failed to attract the ‘mass entertainment’ audience and a lot of blame was put on a less entertaining campaign. People kept talking about the campaigns done by Sony in the last 10 years, but Star India had a definitive strategy behind the ‘Best vs Best’ campaign.
“What comes out from that campaign is that the network was probably targeting the people who watch cricket, but don’t watch IPL. It couldn’t have made a dance and song promo, because their positioning for the tournament was not anything close to that. The network did enough and well, I feel, by launching multiple campaigns throughout the season and personalised regional films for each of the markets. Though, I still believe the impact was not as much as Sony’s campaigns and Star, I am sure, will make this correction in the following years,” said one of the agency heads.
However, the next season would be critical for the broadcaster as it would have to up its game significantly to get the right ROI on the most expensive deal in cricket's history.