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In-depth: How online fantasy sports is becoming a major business in India

With the number of sporting leagues growing in India and world over, online fantasy sports is seeing a massive increase in its user base. The number is likely to increase to 100 million users next year. BestMediaInfo.com tracks the growth trajectory of the industry and finds how soon it is likely to turn profitable

The demand for online fantasy sports has increased by seven times over 2016-2018, whereas the number of users has grown by over 25 times from June 2016 to February 2019, says ‘The Evolving Landscape of Sports Gaming in India’ report by the Indian Federation of Sports Gaming (IFSG) and KPMG India.

Easy availability of affordable smartphones, high-speed internet and falling data prices are currently driving the market for fantasy games in India. This segment has already turned quite profitable globally. In India, league tournaments such as Indian Premier League, English Premier League, UEFA Champions League and ICC events are driving the growth. 

In a fantasy game, participants create their own imaginary teams using real players from different teams scheduled to play in a league or a match. The result of the fantasy match depends on the real performance of the players in their fantasy team. Dream 11, which is based on IPL, is currently the most popular fantasy game in India. 

Fantain Co founders with Suresh Raina

Talking about the phenomenal rise of this segment, Vivek Venugopalan, Co-founder and CTO, Fantain Sports, said, “Fantasy sports offer fans and users real-time engagement with their favourite sporting teams and leagues, which is truly a unique experience for the Indian sporting audience.”

 Another reason why fantasy sports is seeing its fan base expanding so fast is that the domestic leagues have also realised the value of fantasy as a second screen engagement channel that allows the fan to be a participant in the game beyond just watching the game. Hence, several leagues having official fantasy games are helping them proliferate the idea of fantasy sport as a viable entertainment option.

“Lastly, the Indian audience has embraced fantasy sports in a big way. Unlike other games, fantasy sports require a deep understanding of the game with deep knowledge and skill set required to participate. We estimate the number of new players on the fantasy platform will be more than 50 million users today and this will grow to reach 100 million over the next year,” he said.

How far is it from being profitable?

While the demand for online fantasy sports is increasing, monetising has always been a challenge for online games in India. So, how are these games faring on the revenue front? BestMediaInfo.com spoke to industry experts to find out the monetisation model.

According to industry experts, online fantasy sport in India is still in the nascent stage and yet to make profits. While consumption has increased, it is yet to witness a growth in revenue as India is a money-conscious market. Experts say one of the most viable ways for these online games to make profits is to have in-app purchase.

Bindu Balakrishnan

Bindu Balakrishnan, Country Head, DCMN India, said when it comes to online gaming, monetisation is a huge challenge as India is a money-conscious market. “We don't want to invest in something that has no returns. So if users are not getting any monetary gain from it, then they are not interested. That is why it is very challenging for online games to monetise.”

In the US, online games are available for free but the developer earns billions through in-app purchase. But India has a freemium model. A majority of the developers offer a single-match ‘Free to Play’ or ‘Pay to Play’ model of daily fantasy sports.

“The way it works is when you get onto the platform, you have trial and practice games that are for free but to play major games, users have to take premium model. The fantasy sports are skill-based games and hence need in-depth analysis and research about the match, players, grounds in which the matches are being played. Most of these games, according to me, are ad-free as they are using this model. I don't think anybody is profitable yet but they are close to being profitable. So it is very early to say if advertisers can brand their product. Maybe in the future it is possible,” Balakrishnan said.

However, Saroj Panigrahi, Business Head, My11Circle, said even though it is perceived that one needs to add cash to play these games, the reality is that 54% of fantasy players enjoy the game for free. “Around 46% of users have played cash games minimum once in a year. The interesting thing to note here is that only around 25-30% of the spends on a fantasy sports platform come from a user’s pocket. 70-75% of the spends are re-investments that came from previous winnings, cash bonus or periodical promotions given on these platforms,” he said.

Will a mix of advertising and pay per play model work?

According to the IFSG report, nearly 46% of the users were found to have played paid versions of fantasy games in the last 12 months. More than 70% of the users in the Rs 3 lakh per annum earning bracket responded to having paid for fantasy games in the last 12 months. Of these, around 38% of the respondents spent over Rs 500 per month on fantasy sports platforms.

The report states that the potential reason for these spends by respondents earning Rs 3 lakh per annum could be that they view fantasy sports platform as a means to earn incremental/supplementary income in a safe and regulated environment, as opposed to using unregulated mediums such as sports betting.

However, Venugopalan of Fantain Sports has a different take on monetisation. According to him, a large portion of the user base plays free games and the way to monetise it is through advertisements and offers. “A large traffic volume makes advertising a viable revenue source. There is also a significant subset of the audience that participates in 'pay to play’ games and they provide the alternative revenue source for game developers in this genre,” Venugopalan said.

He added, “Advertisers are extremely welcoming to fantasy since they have access to a very targeted and niche audience base (sport lovers of a particular genre) that is interested and actively participates in daily matches. Further, advertisers will have access to these users during the course of a match that they would otherwise have had to target via traditional channels such as TV and outdoor marketing. So this is definitely a good play for advertisers. At Fantain Sports, we provide a freemium model where we have a free pool that allows a lot of first-timers to participate and understand the nuances of fantasy sport. These free users earn 'Fancash' that can be used to participate in the paid games, thus enabling better engagement.”

Cricketing events to drive growth in 2019

IPL has a pull over the masses and the consumption of the sports is not limited to television alone. With Indian Premier League and Indian Cricket World Cup 2019, the experts are stating that it is a golden period for online fantasy sports games. Apart from cricket, other sporting events such as kabbadi, football and basketball also play a significant role in the growth of the online segment.

According to Panigrahi, social media users are actively participating in fantasy cricket applications by discussing the game on cricketing sites going through live commentary. “With factors like the popularity of cricket and rising internet penetration, in IPL 2019 we can see the digital penetration crossing over 300 million viewers. Taking this engagement to the next level are the fantasy cricket applications. Users connect with the game and make predictions for the winning team. What we expect to see this year on fantasy cricket apps like My11Circle is significant engagement with the game and a large volume of registrations. Exciting and innovative competition formats and the ability to showcase cricket knowledge and skill along with competing with real players has made fantasy cricket the preferred medium to enjoy IPL and cricket,” he said.

Venugopalan said, “IPL and World Cup will fuel significant growth for all fantasy sports players, including Fantain. We are looking at a 10x growth in our user base in 2019, given the popularity that the genre is gaining. When the consumer base grows, the advertising world automatically follows. Fantasy sport is played on top of the real sport. So every sporting event has a direct impact on the number of fantasy players. Further, each tournament in itself does not provide the full picture to a fantasy player. Fantasy requires a deep knowledge both of the individual player and team performance across multiple sporting events. So while IPL and World Cup offer a good boost to the genre, the tournaments that lead up to these mega events also help the typical fantasy user understand the game better. It gives insight into the players and teams that are in form and hence every tournament plays an important role when it comes to fantasy games.”

However, Balakrishnan commented that the fantasy sports game has very strong seasonality and the interest for the games goes up and down depending on the matches. “If there is a live match, the interest is really high but if there is no live cricket match going on, then developers might develop mock matches but users don't bet on it, they will play it for free. I think with IPL followed by the World Cup, it is like Superbowl for a fantasy game. It is the time where everybody is gearing up, not only app developers but online players as well. Fantasy sports apps are updating their products and gearing up for a huge influx of fans and it has already started with IPL. Also, interest is higher when India is involved but now people are also playing those matches where India is not involved. So for us at DCMN it is going to be interesting as we have got fan fight on board and we as a company has a lot of experience in online games,” she said.


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