Drop in IPL viewership: Will it impact the value of media rights?

This year’s Indian Premier League’s (IPL) declining viewership might become a matter of grave concern for media companies bidding for IPL media rights and BCCI if it continues to fall any further. 

According to BARC data, in the first week TVR had fallen by 38%, 33% and 32% in the age group 15-21, 22-30, 31-40 against last year’s March-April data. The second week’s ratings slipped further by 40% in the 15-20 age group and by 38% in the other two age groups in comparison to last year’s March-April data. 

While several industry experts pointed out fatigue among people around the matches, poor performance of bigger teams and people returning to office, schools and colleges as common reasons for the ratings to fall, an interesting analogy that has come out for the reduction in the viewership of IPL on TV is the audience base shifting to Free-to-air channels and OTT. 

An industry veteran told BestMediaInfo.com that fall in ratings is always a matter of concern. Even advertisers have started showing concerns over falling TRPs of IPL. But the veteran also emphasised that she is hopeful that it will pick up again in the upcoming matches. “It’s a wait-and-watch situation and too soon to decide this year’s IPL’s fate,” she commented. 

In 2020, the overall IPL viewership witnessed a 23% rise as compared to the 2019 season. Even the second leg of the IPL 2021 season had clocked impressive figures. 

Another industry expert pointed out that the reduction of IPL viewership shouldn’t be a matter of concern for media companies who are joining the fray for IPL media tender auction. He said that whoever gets the media rights this time should focus on strengthening its subscription arm rather than relying on ad revenue. “In abroad, broadcasters' subscription revenue from marquee sports properties forms more than 50% of the total revenue. Whereas, in India, broadcasters earn 20-30% revenue from subscriptions and 70% revenue from ads. Therefore, the broadcaster should start focusing more on improving the distribution and subscription revenue rather than relying on advertising,” he said. 

The e-auction of IPL media rights for 2023-27 will kick off on June 12 at a total base price of Rs 32,890 crore, calculated on the basis of 74 matches to be played every season.

According to the Invitation to Tender document, BCCI has divided the rights into four bundles, including a non-exclusive cluster only for one OTT player.

Unlike last time, there is no option of a composite bid this time around.

Bundle A: India sub-continent TV rights; base price Rs 49 crore per match - total base price for 74 matches per season Rs 18,130 crore.

Bundle B: India sub-continent digital rights; base price Rs 33 crore per match - total base price for 74 matches per season Rs 12,210 crore.

Bundle C: Non-exclusive India sub-continent digital rights for 18 games (opening match, 4 playoffs, night games of the doubleheader): Rs 16 crore per match - total base price for 18 matches per season Rs 1,440 crore.

Bundle D: Rest of the world TV and Digital: Rs 3 crore per match - total base price for 74 matches per season Rs 1,110 crore.

Considering Star India had bought combined rights for 2018-22 at Rs 16,347 crore (Rs 54 crore per match), the base price per match for the upcoming auction is Rs 85 crore (excluding Bundle C), up 57% from what Star India had paid five years ago.

For the non-exclusive Bundle C, which includes 4 playoffs, it is not clear how the board arrived at a base price figure of Rs 16 crore vs Rs 33 crore for league matches, commented an industry expert.

With such high bidding costs, it is to be seen how bidders will be able to break even. Sources told BestMediaInfo.com that Star India did not make money from IPL. Although they were able to build their sports and OTT businesses riding on the bandwagon of the Indian cricketing league.

Star India is expected to earn Rs 4,000 crore from IPL 2022, including digital’s contribution of Rs 800-900 crore. It means Star India will earn anything between Rs 65 crore to Rs 70 crore per match this season.

In an earlier story on BestMediaInfo.com, a senior media analyst had said that if the media rights cost Rs 40,000 crore for a successful bidder, it will have to generate a revenue of Rs 8,000 every year on average. The average earning per match, in this case, should be in the excess of Rs 110 crore. This figure could possibly be reached towards the end of the deal but the broadcaster will have to bear the brunt until then. 

Info@BestMediaInfo.com