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February 2012)
Well, another year has gone past for the sports broadcasting industry in India, and another year which has raised more questions than answers, as the industry stands at the crossroads of survival and glory. Year 2011 started with a bang. A very successful World Cup – at least from an India team view point driving record ratings. The Indian teams performance, a dream semi-final and a terrific final ensured that the ODI got back to an even keel against their more illustrious counterpart - the T20. IPL demonstrated first weakness in the ratings of this very successful event, and the English tour started the demise of an illustrious Indian team, and as I write this, our performance in Australia has affected the cash registers even more. The fans mourn the performance of a team, which could do no wrong a year ago, which is reflecting in immediate ratings and the general mood. In the middle of all this, there was a small matter of a broadcaster falling out with a cricket board, with ramifications which could redefine the sport going forward. We live in India, and sometimes we forget that sport is more than cricket, so it's time for some statistics. The sports genre delivered a growth of 11 per cent in gross GRPs (gross rating points) delivered in 2011. The growth comes down a bit if one includes IPL, but the market share of the genre hovers around 7 per cent of all GRPs delivered. Interestingly, cricket grew driven by the World Cup with 85 per cent share, and non cricket GRPs actually shrunk this year, demonstrating the event driven nature of the Indian sports broadcasting milieu. The reach also increased this year with 5 million more households gaining access to the viewing pleasure of sport. Football demonstrated selective growth, and in some metro markets is a clear number 2 sport to cricket now. Also, clearly as a genre, there is a divide between metro / non metro where in cities like Mumbai and Delhi sports genre share is now climbing into the teens in terms of viewership. The launch of the HD service this year has opened another vista for the serious viewers and will open a completely new high value market, which will grow rapidly. Sports viewers on HD will touch a million by the end of this fiscal and are expected to grow to 5 million in two years time – a significant constituency. The advertising revenues struggled, especially towards the later part of the year. Subscription revenues grew modestly, with DTH (direct-to-home) again driving most of the growth, and financial model of all broadcasters in this business continues to be challenged. As predicted last year, new sports leagues have started burgeoning , and there is clearly a ground traction towards this initiative. Long term , it appears that all key sports will have their own structured leagues, with revenue models around them. Whether television can support all of them is a matter of discussion and evolution, but the on ground model continues to develop in India. The numbers initially will be modest but will help towards building sustainable platforms for these products in India. What was also interesting was to watch the other cricket boards launch their own versions of IPL, and it remains to be seen how these products will impact their markets, and more interestingly, the Indian market – which will have to bankroll these products in some way. The role of our cricket board will also play a part in these leagues as they grow and develop. Sri Lanka Premier League was deferred to 2012 after an aborted take off in 2011, but the Bangladesh Premier League appears to be a reality in the earlier part of 2012. The elephant in the room continues to be Cricket, and that is the issue, which all constituents are grappling with. It should come as no surprise to all if I mention that all broadcasters are struggling with the P&L around the sport. The board / broadcaster issue which I mentioned earlier is driven by the commercial equations of the product. It appears that unless the end subscriber starts paying for the cricket which he watches, and the revenue finds its way to the broadcaster, we are heading into a rather convoluted puzzle with few immediate solutions. The regulatory piece also does not help with mandatory sharing and stipulated pricing, which depresses the pricing across all categories, and also limits placement and revenue generation opportunities at the distribution level. The other issue which needs redressal is the general structure of the game per se. There is a crisis of sorts on the cricketing structure. Test cricket and its primacy appear under threat; there seems to be too much supply of cricket happening and there seems to be lack of cohesion between the ICC and its members on the way forward with the overall structure and scheduling. For the broadcasters, it is becoming a difficult task to be able to value these events in a predictable way for future revenues. In some markets Internet is now a credible force, and Internet piracy is a significant dampener in the current scheme of things. It is incumbent upon all stakeholders now to come together and find solutions for the long term sustenance of the product. 2012 will be an interesting year, which may drive much structural action on our cricket broadcasting model. With so much uncertainty around the main sport, segmentation will be the buzz word in the industry around non cricket sports. While viewing shares in some of the sports continue to be relatively low, our sheer numbers will help us in building profitable models around various products. I expect that the non cricket action will continue to accelerate at the ground level. And while we may not see or feel much happening here because of the sheer mind space cricket holds in our ethos, the real story and action is here. What is happening now will change the Indian sports viewing landscape, the results of which we will see in 5 to 10 years from now. Impending cable digitalisation also needs a mention in the scheme of things. It is possibly the single biggest immediate opportunity facing the business today. The DTH experience has demonstrated that addressable systems can drive a lot of revenue traction for compelling content and sports is clearly at the top of the ladder in terms of specific customer affiliation. Also, with superior delivery vehicles, transparent reporting and better customer interface, this platform brings to all the broadcasters the opportunity to segment, differentiate and build revenue streams around the distribution strategy of specific operators. I foresee this platform to be the next driver of sports distribution revenues in India. The road promises to be rocky but the view in the end should be stunning for all concerned. So sit back, relax, and enjoy the action. 2012 will be a defining year for this business in our part of the world, and events as they unfold should be gripping !! |
