A lot of people from the marketing fraternity are reacting to the ongoing IPL media rights auction. Given the high bids, the split of broadcast and streaming, and that the digital bid went to an OTT platform which isn’t a front-runner, many of them are acting as naysayers. What will be the breakeven rates? Will the market accept such high rates? A split of broadcast and steaming rights will drive the rates further up!
This is not the first time that IPL has had naysayers, and all previous ones have been conclusively proven wrong. I have personally been involved in the first edition and failed miserably in estimating the euphoria and the opportunity which any linear progression can’t capture. Though that’s not to say IPL is akin to the valuation of digital start-ups – we call ‘hauwa’ in Hindi! It is based on sound logic!!
IPL is the No. 1 impact property for India
If you look at the current media scenario, the biggest challenge that the brand managers and planners face is fragmentation. The rise and rise of digital has further fragmented the digital audiences. There is a newer, relevant and growing set of digital marcom opportunities, each with its own set of uniform baseline and measurement challenges. So, we have a huge diverse fragmented audience to cover. IPL today is the only impact opportunity to cover most of the diverse audience segments of India, from regional audiences to those coming from metros and tier 2,3,4 cities. It also provides an opportunity to reach out to all cohorts whether it be Gen Z, Gen X, millennials, the older audience, to the relatively new internet users.
There will be buyers at high rates
We have a track record; IPL rates have shown a very healthy increase from the broadcaster’s point of view, with the highest yield inflation so far. And that is because rates are a function of demand first and then the perceived value of the buy. Being the only real India-wide impact property certainly helps get high rates. Remember, India's story is alive and kicking. So, as India's GDP growth rate accelerates, the ad spending too will rise parallelly, dramatically. Automatically we will have a lot more takers for IPL, led by the unicorns and newer digital players that will emerge. This will negate even the impact of higher rates due to the split of broadcast and streaming rights.
Split of broadcast and streaming rights
To start with, I think, Hotstar and Disney Star have lost a huge opportunity of asserting their dominance. Talking about the effects of the split, on the one hand, digital relevance is obviously increasing day by day. Television too clearly still has a role to play as it has a very high reach and viewership. You cannot make a significant nationwide plan without television, and that will be the case for a few years at least. Having two separate groups to deal with for broadcast versus digital simply means that the rates will be higher. Disney Star has effectively maximised revenues, largely with regional feeds.
Split of broadcast and streaming rights- an advantage for Viacom18
Talking about Voot, IPL is a great opportunity for the app to remodel itself and leapfrog to become one of the leading players in OTT. We will see a slew of digital-led innovations in the OTT and news segment from the Viacom18 group in the days ahead.
All in all, IPL is still a bull story. Period!
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