There are many factors in play in the Indian markets for the dominant Broadcast sector and also the newer OTT digital play. Broadcast today has a massive 40% share of the E&M market and the subscriber base as well as the advertisement dollars continue to support such that it continues to flourish despite greater growth as well as shift to the digital medium. However it will continue to shrink in the total percentage market largely because the dynamics of the markets are changing. The industry has roughly a connected base of 180 million homes for Pay TV which remains intact though the character has changed. The higher paying subscribers have shifted to the subscription based digital offerings and the mass based subscribers are opting for advertisement based free channels. The growth for the large broadcast networks specially the GEC has largely been limited from Hindi and now regional content markets. However one content type which has stood its ground is the Sports content and that too ‘Cricket’ in India.
We have seen many changes in the industry in recent times to counter the natural drift of eyeballs either because of the digital phenomenon or the cost of the cord or the likely investments needed by the traditional broadcasters to hold onto their audiences as well as income flow. The consolidation of few key players like Sony-Zee recently and earlier it was Disney Star bringing their digital as well as linear offerings under the same entity have been steps essentially to guard against such drift and essentially to fund superior or better content. The need for content however remains paramount. Sports Content is an area which continues to be important to the broadcasting community as it continues to attract both digital as well as linear viewership and is amenable to both the subscription as well as ad funded models, the only real problem being its upfront license cost which can be substantial and can be difficult to recover in the license period …We have the India’s biggest and among the world’s biggest properties ..the IPL league which goes under the hammer very soon for the next 5 years and I suspect that all fears are going to be disregarded for bidding for this very coveted prize… Let’s discuss why and who could be the suitors..?
The reasons first as to why is it ‘Coveted’ … and then who would be the players vying for the sweepstakes. The reasons are not difficult to find and the easiest one is that ‘it’s cricket’. For the South Asian diaspora more specifically India it is religion.. just like Soccer is to the rest of the world. But this is not the only one….this league is international, high paying, has consistently grown earnings for advertisers, participants team owners and sponsors across the years and is a proven bet even during covid times. For the broadcasting world it has been a consistent winner, and for many players, transmissibility of content has engendered their entry into the digital world of OTT, the case in point being the success of “HOTSTAR’ , now in the Disney stable. Clearly its hot property… and the larger the interest the higher the purse this time! Who ….then are the likely gladiators ..??
Let’s start with the current players … the known one’s and they are Disney-Hotstar for sure as its their prime property and they will go the distance to protect it since it also contributes substantially to the subscriber base of Disney+ worldwide. The other significant player is Sony-Zee after their combination. Sony will look to get back its initial property and the the newly infused cash in the joint entity will help. Before I move to the other players there is the third large broadcaster Reliance- Viacom which desperately needs a content boost to its currently declining standing and IPL could be the answer. With the recent newspaper reports suggesting collaboration and coinvestment with Reliance by Mr Uday Shankar ( the key architect for Disney earlier) along with James Murdock, for this coveted property the contest will be riveting. Besides these three key interests… the others with substantial moneybags like Amazon Prime, Netflix could also be in the fray…. The contest as I said earlier will be riveting though the increased cost will be a dampener for returns even though the eyeballs are assured.
The most important question then is that what do we think the value will be this time both for broadcast as well as the digital rights. The winning bid last time was Rs 16000crs ($2billion approx). What will it be this time..? Have a feeling its likely to double or more…! Lalit Modi needs to take a bow for being the mentor of such a property …. For the rest of us lets enjoy the action and of course the game!!