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  • ‘We have been profitable for the second year in succession’ Manoj Badale – Rajasthan Royals chairman and co-owner

    ‘We have been profitable for the second year in succession’ Manoj Badale – Rajasthan Royals chairman and co-owner

     It has been a mixed bag for the Indian Premier League (IPL) franchise Rajasthan Royals over the last couple of years. Having come out on top in the first year, the franchise failed to reach the semi-finals after the venue for the second edition shifted to South Africa.

     

    However, Rajasthan Royals made a profit for the second year in a row. It also got Shilpa Shetty and UK-based Raj Kundra to take 12 per cent stake in it for $16.8 million (Rs 820 million), valuing the franchise at around $140 million (Rs 6.83 billion), more than double the $67 million that the owners, Emerging Media, paid for it a little over a year ago.

     

    Rajasthan Royals has been aiming to create a differentiated brand with focus on innovation, youth, the team ethos and the ‘win from anywhere’ mantra.

     

    While priority is to play better cricket, the off-field focus is to reach out to its local and international fan base. Building a sustainable merchandising programme is also on the agenda.

     

    In an interview with Indiantelevision.com’s Ashwin Pinto, Rajasthan Royals chairman and co-owner Manoj Badale denies that he has picked up a majority in the franchise and talks about its growth plans.

     

    Excerpts:

    There have been reports that you have picked up a majority stake in Rajasthan Royals. Is this true?

    All these reports are inaccurate. There has been no change in the shareholding structure. We are fortunate to have investors based in the UK, India and Australia. This gives us a global perspective on the decisions we take as a company.

    Do you think the IPL in South Africa helped in exposing the brand globally?

    The move was a great opportunity for us as well as the IPL to expand the global audience and win a lot of new fans outside of India. We learnt a great deal about the international potential of ‘Brand Rajasthan Royals’. We successfully experimented with our merchandise and the ‘Royal Turban’ and the ‘Royal Mooch’ (moustache) became synonymous with Rajasthan Royals and its fans at all the games.

    Was it a logistic nightmare to shift base to a foreign land?

     

    The move to South Africa gave us as well as the organisers only about three weeks to put together everything from scratch. But the vast majority of the work was undertaken by the IPL and IMG teams. Our work for the Rajasthan Royals was far less than theirs, although our initiatives in creating practice matches against the 2008 South African champions added to a busy workload.

    The main challenges related to travel, merchandise and local marketing. We overcame these by working with local partners, and leveraging our sponsors wherever possible.

    Is it true that Rajasthan Royals made a Rs 250 million profit?

     

    We do not like to provide specific comments on our financials. However, we are happy to have been profitable for the second year in succession.

    Rajasthan Royals had earlier stated that its goal was to breakeven in three years. Are you on track to better this?

     

    Yes, we are! But we can’t rest on past performance.
    ‘I am not sure that any country can replicate the IPL. Matching the IPL is not a realistic one. There are too many things that are unique to India that make the IPL the success that it has become‘

     

    What activities are you planning to keep the brand alive?

     

    We have already reached out to the UK. We played in front of 22,000 fans at Lord’s against the 2008 English 20:20 champions Middlesex. We are exploring other alliances and strategic partnerships in different geographies across the world.

    In India we do fan ‘meets’ and ‘greets’ as a regular exercise throughout the year. We also sponsor the Jaipur based T20 local league called the Royals Cup. The plan is to scale these into bigger events with more participation from sponsors and fans.

    Do you have any licensing and merchandising plans for this year or are you waiting for next year?

     

    Yes, we have many. We believe that licensing and merchandising is the most unexploited area for the team, and our focus is to continue to explore strong partnerships in this regard. We hope to create a long term and sustainable merchandising programme around the team.

     

    Our licensing and merchandising programme continues to grow and Shilpa’s presence is a huge benefit – with lots of great new ideas.

    What are the key elements one needs to keep in mind when designing this?

     

    It is important to pick a few categories that have potential in a developing market such as India. The temptation is always to do multiple deals. But we need to look for strategic partnerships with products and brands that share our brand values.

     

    It is also important to execute well, once we have identified our focus areas. My hope is that we will see exciting partnerships in the areas of retail, apparel and gaming this year.

    Shilpa Shetty and Raj Kundra have taken a 12 per cent equity stake in Rajasthan Royals. Will this help?

     

    Through this investment, we feel that we got dual benefits at the price of one. Raj contributes business acumen and is a great addition to our board. With Shilpa’s international status and media experience, we are gaining a real advocate for our team and enhancing RR’s global brand.

     

    It clearly expands the off-field options available to us. Overall our strategy will always be to prioritise the cricket. But off the field, we will expand our activities to reach out to our local and international fan base.

    Is it true that deals can’t solely rest on the on-field performance but also on the brand attributes?

     

    We think that our brand values are extremely differentiated. We focus on innovation, youth, the team ethos, and the ‘win from anywhere’ mantra.

     

    This is ‘Brand Rajasthan Royals’. Our sponsors and merchandising partners have a lot to gain with that type of association. The brand needs to be built holistically and not just around on-field; it should also represent what its stands for, off-field.

    How is Rajasthan Royals perceived as a brand?

     

    What people tell me is that we are the IPL’s most loved team. This is due to our brand of cricket, our team ethos, and our emphasis on youth. People like the underdogs, which seems to be a label that we are yet to shake. I think that we are also seen as a very internationally mobile franchise.

    In-stadium hospitality will be an important revenue source going forward. Has Rajasthan Royals firmed up plans in this area?

     

    We are constantly testing, and iterating our plans. There is lots of ‘best practice’ across the world from events across all sports.

     

    However, the right in-stadium experience has to be customised for the IPL, which has its own unique characteristics – the brevity of the match, the relatively short period of time that fans are in-stadia (but not watching the game); and the mix of demographics in different parts of the stadia. As is the case for much of our business, there is no single ‘silver bullet.’
    How successful has the Rajasthan Royals been thus far in exploiting new media?
    It is too early to talk about success, but we are pleased with our innovation and activity levels – the e-commerce platform works well. Our work on Facebook and Twitter has yielded positive results. Our mobile communities are also excellent.
    What are the plans to take the reality show Cricket Star to another level this year?
    We’re talking to Indian and international production houses. Our ambitions with Cricket Star remain big and we are enthusiastically pursuing various broadcasting platforms.
    While the objective of this show is to harness the power of raw talent concerns, have been expressed that budding cricketers will focus more on T20 as it is more lucrative and give short shrift to the other two formats. What is your take on this?
    The objective is simply to unearth new cricketers. The economic reality of focussing on T20 is a choice that individuals need to make. Personally, I think that Test cricket still has a healthy future, if managed properly by the administrators.
    What other entertainment-based sports formats is Emerging Media looking at?
    Currently we are focussing on popular sports like cricket and soccer as we believe the market is still some time away from justifying early stage investment in other sports. We are looking at a soccer-based TV show. We will be able to share more details on this later. However, prospects for golf and tennis are promising.

    The English Cricket board scrapped plans for P20. How difficult will it be for the other countries to do a league that is as financially successful as the IPL?

     

    I am not sure that any country can replicate the IPL – nor do I think they should be trying to. Each country has to look at what is best for its fan base, what parts can be exported to India, and what parts can be borrowed from other tournaments.

     

    Moreover, it is important to have realistic objectives – and matching the IPL is not a realistic one. There are too many things that are unique to India that make the IPL the success that it has become.

    Emerging Media and the other IPL franchisee owners are looking to register their trademark in different countries to protect their IPR. What is your strategy in this regard?

     

    This is part of the framework for our IP protection. If we, as part of the IPL, have global ambitions, then we need to protect our identity, even before we reach out to foreign markets.

     

    All teams and the IPL are globally recognised brands. We are just ensuring that we’re legally protected as well.

  • Olympics third least viewed in India

    While the Olympics recorded strong viewership in a lot of countries, India remained among the bottom three markets in terms of television viewership for the Olympics. New Zealand tops the list in viewing the biggest sport extravaganza of the year.

    According to Lintas Media Group report on the viewership patterns of the Olympics 2008 on TV across the globe received this week, the top 10 Olympics events in India together delivered a 1 TVR while the top viewing market New Zealand garnered a TVR as high as 22.6 for the top 10 events.

    Source : Lintas Media Group report

    The report has been compiled based on information and analysis of Olympic games TV viewing across 42 markets around the world. These markets include the US, UK, India, France, China, Russia, South Africa, New Zealand, Netherlands among others.

    The report states that the opening and closing ceremonies attracted 87 and 73.2 million of people in 35 countries respectively. Traditionally, the opening and closing ceremonies are among most watched Olympic events.

    Lintas Media Group chairman and CEO Lynn de Souza says, “India is not yet an Olympic nation. We make heroes of those who do manage a medal, but the medals are so few and far between, and most of the events do not have fan following among the masses. It‘s not surprising that viewership was low.”

    Source : Lintas Media Group report

    Tam data meanwhile shows that 74 million Indians tuned into the biggest sporting event of the year the Olympics which aired on DD Sports last month from 9-24 August. Tam data also shows that while the opening ceremony drew 28 million viewers, the Closing Ceremony only had 15 million. In the metros where the event fared the best it managed a total of 89.9 GRPs from 9-24 August.

    The highest GRPs recorded were 8.2 on 20 August driven by athletics. On 16 August, the GRPs were 7.7, driven no doubt by a surge in interest following Abhinav Bindra‘s Gold in shooting.

    The GRPs managed on the last day were five. The GRPs on the opening day were not far behind at 4.6 which is impressive given that there was only the opening ceremony. On the other hand, on the last day besides the closing ceremony you also had the finals of some boxing events as well as the men‘s basketball final among other things.

    Boxing, athletics and swimming were some of the sports that drove viewership. In the non-metros, the event managed to garner 60.2 GRPs. At an all-India level the figure is 70.4 showing that sport is more a metro-viewing phenomenon. The fact that sport is a male dominated viewing activity is borne out by the fact that 65 per cent of the audience was men. Sec and Sec B took a little over half of the viewership.

    In 2004, 67 million viewers tuned in to the extravaganza. Then also the Opening Ceremony did better with 8 mn viewers than the Closing Ceremony with five million viewers. Of course one has to keep in mind the fact that the Tam panel was expanded in 2006.

    Source : Lintas Media Group report

    Athletics, boxing, basketball, gymnastics and swimming were the most popular sports in the Olympics 2008. The top 10 Olympics events put together garnered an average of 8.4 TVR across the markets.

    Apart from New Zealand, Netherlands, Denmark, Lithuania and Thailand watched the Olympics the most. This is despite the fact that they are not leading countries in getting medals apart from the Netherlands which got 16 medals. China watched the Olympics on an average global level while Russia was much below the average global TVR.

    Apart from India, the other markets that watched the Olympics the least were Lebanon, Indonesia, Ukraine and Philippines.

    NBC hits the jackpot

    All these figures though pale in comparison with what US broadcaster NBC achieved. The broadcaster managed to get 214 million viewers across the event. NBC had pushed the Olympics across different properties. For example, the Today show benefitted as did Nightly News. The cable networks airing Olympics coverage also benefitted, drawing a total of 88 million viewers. CNBC, MSNBC, USA and Oxygen all delivered audience increases across key demos. Online at NBCOlympics.com, meanwhile, there were 75.5 million video streams, 51.9 million unique users, 1.24 billion page videos and a total of 9.9 million hours of video consumed.

    The Global Scene

    Nielsen Media Research estimated that 4.7 billion viewers watched some part of the Olympics. About 70 per cent of Earth‘s population was engaged making the Beijing Games the most-viewed event in TV history. The figure surpassed the 3.9 billion who watched some part of the Athens Games in 2004. Four years earlier, the Sydney Games garnered some 3.6 billion. 94 per cent of China‘s TV homes watched some part of the games.

    South Korea matched China‘s 94 per cent share, albeit gauged against a smaller population base, while 93 per cent of Mexican residents saw some part of the Games.

    The Ad scenario

    While Doordarshan had failed to get big sponsors this year for Beijing Olympics it looks like it‘s the news channels that have raked in the actual moolah.

    Doordarshan deputy DG sports Ashok Jailkhani says, “At the time of the Athens Olympics, DD had earned Rs 50 million of revenue and this time we have been able garner around Rs 80 million of revenue.” DD is believed to have spent around Rs. 170 million on the games.

    However, this year the absence of major advertisers were felt. The list of advertisers for this year‘s Olympics included Samsung, BSNL, LIC and the ministry of rural development apart from Maruti, ITC, Amul, Lenovo and some government departments.

    Says Prasar Bharati CEO B S Lali, “Last time, during Athens Olympics, DD had big sponsors like IOC who had invested Rs 20 million and Hero Honda had invested Rs 10 million. This time, that kind of large sponsors were missing yet the number of advertisers that had come to DD was much more as compared to the last time.”

    Mindshare‘s Amin Lakhani notes that news channels created hype around the event especially when India won three medals. “There was a lot of analysis. Each day one could catch highlights. This meant that viewers tuned in to them to catch the action. Advertisers naturally followed suit and many of them preferred news channels to DD. Also DD did not do any marketing but that was to be expected. When does DD ever market an event?”

    NBC made over a billion dollars from the Olympics. Hot day parts included swimming and gymnastics particularly with Michael Phelps breaking Mark Spitz‘s record for most gold medals in a single Olympics. Oxygen‘s gymnastics coverage gained interest from advertisers who were looking for female demos, and CNBC‘s coverage of boxing got money from advertisers looking for heavily male-skewed demographics.

    Need for Introspection

    DD had despatched teams of 11 cameras with crew to cover the event but DD‘s coverage of the event drew flake and the public broadcaster was forced to remodel its programming after an emergency meeting.

    Lali concedes that there is always scope of improvement. “In case of the Beijing Olympics, the DD crew reached the venue quite late. And, yes, the overage was criticised however an instant action was taken by the DD crew to provide better coverage at their end.”

    While the Beijing Olympics have ended for now, the public broadcaster will be holding a review meeting where it will take a close look at what went wrong so that it prepares itself for the Commonwealth Games in 2010.

    “We will hold a review meeting and draw a list of lessons that we have learnt from this year‘s Olympics. There have been some issues like the packaging of programmes, selection of commentators, the style of covering the event, etc; which requires thought,” noted Lali.

    News channels made hay as India shone with single Gold

    As the medal tally of India shone with a single Gold and two Bronze, news channels made hay. In the 17-days sports extravaganza news channel both Hindi and English diverted the spotlight to Olympics coverage.

    As per Tam data, HSM, 15+ , C & S, Hindi news channels devoted 5036 minutes (8 to 24 Aug) from a marginal 382 minutes (22 July to 7 Aug) in covering sports.

    The English news channels increased its coverage of sports exponentially. From 1705 minutes (All India, 15+, C &S), coverage of sports by English news channels surged to 7060 minutes during the 17-days of Olympics.

    Sports coverage by Hindi news channels increased to 3 per cent, while it has expanded to 4 per cent from 1 per cent in the English news channel space.

    Naturally, the sports genre in Hindi news channels increased to 4 per cent (8 to 24 Aug) from 0.8 per cent (22 Jul to 7 Aug). During the period, in the English news channels space the genre expanded to 7.5 per cent (All India) from 1.8 per cent.

    As per the Centre for Media Studies (CMS), NDTV 24X7 did 112 stories, 13 special shows and as a whole devoted 738 minutes on Olympics coverage. On the contrast, DD News had 1133 minutes of Olympics stories of which 24 were special stories. CNN-IBN devoted 914 minutes (24 special stories) of Olympics coverage, NDTV 24X7 738 minutes (13 stories), Aaj Tak 627 minutes (24 special stories), Zee News 607 minutes (17 special stories), while Star News had only 507 minutes (14 special stories).

     

     

    Conclusion

    Doordarshan would have done far better had there been more planning. To say that the airing was ad hoc and haphazard was to put it mildly. Take, for instance, the swimming. Michael Phelps going for eight Gold medals and successfully doing it is something that might not be repeated for quite a while. Broadcasters including NBC in the US used this as their tentpole event everyday while the swimming was on. That created huge appointment viewing. Not DD though. Sometimes he was shown, sometimes he wasn‘t.

    Sometimes instead of this marquee event, a preliminary hockey match was shown. On another occasion, a gripping and close men‘s tennis semi-final match between Nadal and DJokovic was cut short as the broadcaster felt it fit to showcase India‘s performance at Beijing for that day. Surely this could have waited or aired on DD National.

    What was also infuriating was the inane discussions that went on in the studio while medals were being decided upon. In fact ESS who has the rights for the 2012 London Olympics should study what DD did as a lesson on how not to cover the event.

    Expecting any other sports event other than cricket to find more TV viewership loyalty is a futile exercise. However, still hoping for a bite in the ad and viewership pie of the Commonwealth Youth Games and Commonwealth games, Prasar Bharati and the Press Information Bureau are investing Rs 4.63 billion for its coverage.

    The Youth Games are commencing in Pune on 12 October and will continue till 18 October while the XIX Commonwealth Games are to be held at New Delhi from 3 to 14 October 2010.

    Prasar Bharati through Doordarshan and All India Radio is the host broadcaster of both the Games.

    Meanwhile, the Union Cabinet has approved the release of additional funds of Rs 435 million to the Organising Committee for the conduct of the Commonwealth Youth Games, thus raising the total to Rs 1.10 billion. This is in addition to the funds made available by Government of India for City and Sports infrastructure to the funds given by the Maharashtra Government for Pune for the Commonwealth Youth Games.

    The Government had earlier approved an expenditure budget of Rs 7.67 billion as a loan to the Committee of Commonwealth Games for conduct of Commonwealth Games 2010 and Commonwealth Youth Games, out of which a budget of Rs 665 million was for the conduct of Commonwealth Youth Games.

  • IPL lived up to the hype

     
    IPL lived up to the hype
     

    Still hung over. That is what many of those directly involved in putting together the greatest pop cricket spectacle ever staged are still feeling even a week after the first edition of the Indian Premier League (IPL) championship came to its heady climax.

    The biggest cricket show on earth more than lived up to the expectations of those who invested in it. The public took to it, the corporates were sold on it, telecaster Sony hit pay dirt and the key individual behind it all – IPL chairman and commissioner Lalit Modi -won the grudging admiration of even his worst detractors. The fact that the event created a $2 billion market without a ball being bowled has been simply amazing.

    Realms have already been written on how the perfectly packaged blend of highly competitive sport, merged with heady doses of ‘celebrity and entertainment masala‘, had the cinema, television and retail industries collectively reeling.

    And the hype that was emanating out of India had its ripple effect across the globe. One could argue that it is linked to the fact that the Indian economy is increasingly being written and spoken about in the global press, but it is no small matter that virtually every big international publication did in-depth stories on the IPL speaks for itself. In Australia a million people watched the first match although it was past midnight there. UK‘s Setanta declared that its subscriber base has risen between 17-20 per cent on the back of the IPL. These are just some of the heady stats that the IPL has thrown up.

    Read on for a reality check on the IPL from the point of view of the four key constituents – Sony, team owners, BCCI and the public.

    Sony home safe and dry:

    Ratings were what Sony was tracking and they held up throughout, delivering above expectations more often than not.


    Click for complete data

    Before the IPL started there was scepticism about how the event would fare. Even when the event initially delivered strong numbers there were doubts on whether the momentum could be sustained. Naysayers carped that the novelty might wear off, Australian players leaving would prove to be a dampener, etc.

    This data though should silence them. Tam data c&s 4+ all India shows that the IPL managed to achieve an average of 4.7 over 57 matches on Max. This shows that viewer interest did not flag. The opening match between Kolkata and Bangalore got the highest rating of 7.19. Next came a crucial match between Chennai and Mumbai which managed a rating of 6.58. A match between Kolkata and Delhi as the race for the semi final spots hot up managed a rating of 6.27. Both the semi finals also got ratings of over 6.

    This though, is less than half of the ratings that the semi final and final of the T20 World Cup got. India‘s semi final against Australia managed to get a rating of 13.4 while the dream final against Pakistan managed an astronomical 15.9. What this shows therefore, is that there is still plenty of room for improvement as far as the IPL is concerned.

    An average of 31 million people tuned in for each of the IPL semi finals. The figure is the same as that for the 2007 World Cup final that was played between Australia and Sri Lanka. One must keep in mind though that the World Cup also aired on DD. For the T20 World Cup final on ESPN, the reach figure was 48 million. IPL reached 99 million viewers throughout its duration.

    It is also pertinent to note that the importance of matches also played a role in the IPL ratings. For instance Mumbai‘s last match against Bangalore only got a rating of 2.13. This was because the Reliance owned franchise was out of semi final contention by then.

    The kind of ratings numbers that the IPL has delivered for Sony also means that it is ahead of the curve on its revenue targets as well.

    Of the first year payout commitment of the $ 59 million to the BCCI for telecast rights, Sony‘s share was $ 55 million. Sony had built in a $ 4 million shortfall in the first year into its calculations. That seems to have changed with Sony president network sales, licensing and telephony Rohit Gupta expressing confidence that the network will at least be on break-even point once final calculations have been done. This is largely on the back of the huge response the event got from the viewing public. After its main inventory was sold out, the channel was able to jack up rates for the 200 seconds that it had in the bank for each match. “For the semi finals and final we sold at Rs 8-10 lakhs per 10 seconds. We have set a benchmark pricing for the second season,” asserts Gupta.

    That assertion only reinforces the confidence Set India CEO Kunal Dasgupta essayed in an interaction with Indiantelevision.com before the IPL kicked off when he stated, “In the first five years we will make $100 million in profit. In the next five we will make half a billion. My ad sales will treble after five years.”

    Team owners ahead of delivery curve:

    For this year, the average expenditure per franchisee, according to Indian television.com calculations, was $ 17.5 million (the least being Jaipur‘s Rajasthan Royals at $ 15 million and the most being liquor tycoon Vijay Mallya‘s Bangalore Royal Challengers at $ 20 million). Considering that most team owners began this exercise factoring in the possibility of having to take a hit of anywhere between $ 3-7.5 million hit in Year 1, all of them (bar one) would be more than satisfied with what they have managed and the response the IPL has garnered thus far.

    As of now, and depending on who you talk to, it is either Kolkata or Chennai that have likely hit break-even.

    Kolkata was far and away the best managed as far as brand associations and merchandise sales were concerned but it was Chennai that was the most successful in terms of gate receipts.

    Breaking down the numbers, GroupM ESP (consultants for Hyderabad‘s Deccan Chargers) managing partner Hiren Pandit states: “The franchises have received around $ 7.5 million from central revenues. In terms of local revenues (prize money, local sponsorship, gate receipts) Kolkata would have earned the most at $ 11 million while Punjab would have got the least at $ 5 million. Where Kolkata did really well was in sponsorship where it got $ 7 million.

    “Bangalore would not have made much here as the UB Group was using it to push their own brands. In terms of losses I estimate that Bangalore lost around $ 10 million.” This loss, Pandit, is quick to point out, needs to be weighed against the kind of brand activation opportunities that will be available to the UB Group, going forward.

    As for the smaller teams like Punjab and Jaipur, they would have struggled the most on both brand associations as well as gate receipts (as their grounds are small).

    Public are loving it:

    The response in the stadia was what no one was sure about, but by all accounts it has proved a big hit all across, even in the smaller centres.

    Interestingly, it was Mumbai that had to go the furthest in its efforts to attract crowds. Why is that? Because Mumbaiites are the most spoilt for choice, in terms of avenues for entertainment. Additionally, commute times are the longest in Mumbai so for potential ticket buyers, logistics also plays a big part.

    A stadium like Hyderabad on the other hand, gets to host a One Day International once in two years, if it is lucky. The IPL more than anything else is offering access to a whole new form of entertainment and the public is lapping it up.

    What will clearly not work for any team though, is the traveling fan concept. Home games means just that – home games. India‘s geography simply does not allow for fans to travel with their teams.

    The Future:

    So what next for the IPL? Where does it go from here? At this stage it is all more talk than concrete plans but the intention is clearly to take the IPL global.

    IPL governing council member IS Bindra, has been quoted as saying that the IPL is just the first step of a “grand vision” that will eventually lead to the birth of a network of similar franchise-based models across the major cricket-playing nations. That is something that WSG South Asia CEO Venu Nair endorses wholeheartedly. Going forward, Nair is in favour of cricket going the soccer route. In soccer, leagues are more important than countries. “Cricket should follow the same route to survive. At the moment you have some events like the Champions Trophy, which are useless.”

    “You could (instead) have a World Cup preferably in the T20 format once in four years. The rest of the time league cricket could be played in different countries. What this would mean though is that other countries would have to set up strong leagues of their own. This would ensure that all the boards make money, which could then be used for the development of the game.. At the same time players would benefit, as financially there would be no need for most of them to play for more than five years. The current theory that one needs a 15 year career is outmoded. The ICC‘s role would still be to govern the game. Nobody loses out.”

    An issue that franchisees will have to look at is to build loyalty among fans for a set of players. Another key thing for franchisees is gate receipts. Nair feels that more attention has to be paid to premium seating. “Abroad premium seating accounts for 40 per cent of gate revenue. At the moment though, only Chennai, Jaipur and Punjab have adequate facilities for premium seating. The rest of the franchisees will have to invest in this along with the state associations. The lack of adequate facilities and a high quality experience for those in the premium seating area is why Reliance reduced prices for the semi finals in Mumbai.”

    In conclusion, whatever may be the postmortems different agencies engage in now that the event is done and dusted, it would be difficult to argue that any of the parties that chose to be associated with the event did not get more than their money‘s worth.

    Team owners ahead of delivery curve:

    For this year, the average expenditure per franchisee, according to Indian television.com calculations, was $ 17.5 million (the least being Jaipur’s Rajasthan Royals at $ 15 million and the most being liquor tycoon Vijay Mallya’s Bangalore Royal Challengers at $ 20 million). Considering that most team owners began this exercise factoring in the possibility of having to take a hit of anywhere between $ 3-7.5 million hit in Year 1, all of them (bar one) would be more than satisfied with what they have managed and the response the IPL has garnered thus far.

    As of now, and depending on who you talk to, it is either Kolkata or Chennai that have likely hit break-even.

    Kolkata was far and away the best managed as far as brand associations and merchandise sales were concerned but it was Chennai that was the most successful in terms of gate receipts.

    Breaking down the numbers, GroupM ESP (consultants for Hyderabad’s Deccan Chargers) managing partner Hiren Pandit states: “The franchises have received around $ 7.5 million from central revenues. In terms of local revenues (prize money, local sponsorship, gate receipts) Kolkata would have earned the most at $ 11 million while Punjab would have got the least at $ 5 million. Where Kolkata did really well was in sponsorship where it got $ 7 million.

    “Bangalore would not have made much here as the UB Group was using it to push their own brands. In terms of losses I estimate that Bangalore lost around $ 10 million.” This loss, Pandit, is quick to point out, needs to be weighed against the kind of brand activation opportunities that will be available to the UB Group, going forward.

    As for the smaller teams like Punjab and Jaipur, they would have struggled the most on both brand associations as well as gate receipts (as their grounds are small).

    Public are loving it:

    The response in the stadia was what no one was sure about, but by all accounts it has proved a big hit all across, even in the smaller centres. 

    Interestingly, it was Mumbai that had to go the furthest in its efforts to attract crowds. Why is that? Because Mumbaiites are the most spoilt for choice, in terms of avenues for entertainment. Additionally, commute times are the longest in Mumbai so for potential ticket buyers, logistics also plays a big part.

    A stadium like Hyderabad on the other hand, gets to host a One Day International once in two years, if it is lucky. The IPL more than anything else is offering access to a whole new form of entertainment and the public is lapping it up.

    What will clearly not work for any team though, is the traveling fan concept. Home games means just that – home games. India’s geography simply does not allow for fans to travel with their teams.

    The Future:

    So what next for the IPL? Where does it go from here? At this stage it is all more talk than concrete plans but the intention is clearly to take the IPL global.

    IPL governing council member IS Bindra, has been quoted as saying that the IPL is just the first step of a “grand vision” that will eventually lead to the birth of a network of similar franchise-based models across the major cricket-playing nations. That is something that WSG South Asia CEO Venu Nair endorses wholeheartedly. Going forward, Nair is in favour of cricket going the soccer route. In soccer, leagues are more important than countries. “Cricket should follow the same route to survive. At the moment you have some events like the Champions Trophy, which are useless.”

    “You could (instead) have a World Cup preferably in the T20 format once in four years. The rest of the time league cricket could be played in different countries. What this would mean though is that other countries would have to set up strong leagues of their own. This would ensure that all the boards make money, which could then be used for the development of the game.. At the same time players would benefit, as financially there would be no need for most of them to play for more than five years. The current theory that one needs a 15 year career is outmoded. The ICC’s role would still be to govern the game. Nobody loses out.”

    An issue that franchisees will have to look at is to build loyalty among fans for a set of players. Another key thing for franchisees is gate receipts. Nair feels that more attention has to be paid to premium seating. “Abroad premium seating accounts for 40 per cent of gate revenue. At the moment though, only Chennai, Jaipur and Punjab have adequate facilities for premium seating. The rest of the franchisees will have to invest in this along with the state associations. The lack of adequate facilities and a high quality experience for those in the premium seating area is why Reliance reduced prices for the semi finals in Mumbai.”

    In conclusion, whatever may be the postmortems different agencies engage in now that the event is done and dusted, it would be difficult to argue that any of the parties that chose to be associated with the event did not get more than their money’s worth.

    (Graphics and design by Kavita Sangoi)

    Also Read:

    Sony reaps IPL rewards for innovation, concerted effort

    Indiantelevision.com’s interview with GroupM ESP managing partner Hiren Pandit

  • Sony reaps benefits of innovation concerted effort

    Sony reaps IPL rewards for innovation, concerted effort
     

    The Indian Premier League‘s success has exceeded everybody‘s expectations, including that of broadcast rights holder MSM India‘s Max channel.

    While no one will argue against the fact that the kind of success IPL‘s inaugural edition has enjoyed could never have been anticipated, even by the most die-hard optimist, due credit must be given to the broadcaster on two fronts – innovation and a concerted marketing effort.

    Logistical challenges: Max business head Sneha Rajani notes the IPL was an innovative format to begin with. So everything done was innovative by default. “At the same time, though we needed to do a lot of things in two months, we sat together with the team owners to put it all together.

    “It was a day and night task. It was logistically more difficult that the World Cup. Mind you for the 2007 World Cup we had two years to plan things. The IPL had more crowds, more flight movements and more equipment – all of which had to be dealt with. I feel that it is a miracle that everything went off so smoothly.”

    Innovation: After five years of success with its wrap around show Extraaa Innings, Max decided to completely revamp it. “We wanted to refresh it and turn it on its head. We did not want to continue with the same format. It became a one hour show. We went from a remote central studio to a studio that was based on the ground closer to the action.”

    It also introduced young faces as anchors. 600 people were auditioned. Rajani explains that the aim was to have faces that the youth could relate with. “Mandira Bedi is an icon, a superstar. It is difficult for the youth to relate to her. So while the auditions made life more difficult for us we were determined to do it. We went with fresh young male faces.

    “We needed multiple anchors to be the main presenters in the studio and the roving reporters on the ground. We found the six anchors and the format was tweaked to make it crisper. We even conceived a song for Extraaa Innings Karo Ya Maro.”

    She asserts that after the channel introduced Mandira Bedi five years back, many channels started to copy the formula. “The best form of flattery is imitation. As we are leaders, we then decided to turn it on its head for the IPL. Nobody anticipated that we would go with youthful guys.”

    Astute marketing: Sony president network sales, licensing and telephony Rohit Gupta says that one of the main reasons for the IPL‘s success was the marketing effort that was done by all the parties involved. “The activities began well before the event kicked off. Different people marketed different properties. This generated huge interest among the media. As a result people sampled it. They stayed on thereafter as great cricket was on offer.”

    Rajani adds that at the start the broadcaster sat down with the franchisees to set up a blueprint in terms of who would be doing which activities and at what period of time. At the start the IPL did its campaign. This was followed by campaigns by the different team owners. Finally Max did its own marketing in the four-week lead up to the event.

    “A chart was drawn out as to who would be doing what and at what stage. The timelines were met. The IPL‘s campaign Cricket ka Karamyud was distinct. The owners had concepts reflecting their personalities. Preiti‘s for instance, had a North Indian Punjabi feel.”

    Max‘s IPL campaign slogan was Manoranjan kA Baap. Rajani explains that last year, when Max had made a presentation to the BCCI, they wanted to position the event as the greatest spectacle there is as far as cricket is concerned. The channel‘s team stuck to that positioning throughout. “We knew that the campaign had to stand out. We gave the campaign a 70‘s movie feel with a lot of melodrama. This was key as we were competing with the soaps and serials bang on. Our message was that the IPL was something that would break the shackles of the soaps and movies, which have been ruling the roost.

    “The feedback to our campaign stunned us. People understood what we were trying to say. Our message was that IPL is a quick fix reality show. It takes the same time as a film to complete.”

    Less is more: What is interesting is that Max did just one major interactive initiative for the IPL. This was in association with Godrej and through SMS one could win a fully furnished flat worth Rs 10 million. The aim was not to have a cluttered environment. Also the three-hour duration of a match does not give one too much time to do things.

    The Ad Scene: There was scepticism prior to the event that the cricket would not be serious. The fear was that huge money would dilute the game. All that though was hogwash and high quality cricket won in the end. “The T20 format is powerful. Ratings were above 7 among males 15+. This is what cricket advertisers target,” explains Gupta.

    On the revenue front, Gupta notes that Sony expects to at least be on the break-even point once final calculations are done. Earlier, the expectation was that there would be a shortfall of around $ 4 million in the first year. However, since the response was huge, the channel was able to scale up rates for the 200 seconds that it had in the bank for each match. “For the semi finals and final we sold at Rs 8-10 lakhs per 10 seconds. We have set a benchmark pricing for the second season,” asserts Gupta.

    The pricing for season two will be aggressive. In fact Sony is looking to do deals by mid-July. This would give the sponsors eight to nine months to plan activities. “Our existing clients are keen to return. We want to give brands enough time to get their act together so that they get full value from it,” says Gupta.

    Plans going forward: In terms of the rub off effect, Gupta notes that the IPL has given the broadcaster a good platform to launch Dus kA Dum. “We were able to promote our big shows well. Something similar happened in 2003 post the World Cup.”

    And what is life like for Max, now that it has returned to being a movie channel? Rajani explains that on 2 July, the day after the IPL finished, the channel started a film initiative Great Pictures Lagaataar (GPL). This is a festival of blockbusters that air from Monday to Friday at 8 pm. Max will also premier films this month like No Smoking and Gandhi My Father.

    In terms of the IPL the plan is to do activities with the franchises to keep the brand alive. In a few weeks time Max will sit down with the franchises and discuss initiatives that could be done. This could include specials on the teams, focus on key players etc. There would also be a retrospective on the first season. “People will not sit and wait for the next event that happens next year,” notes Rajani.

  • “With IPL you have the power of 10”

    “With IPL you have the power of 10”

    It’s the festival of lights. And for many the festival of noise courtesy exploding fireworks. In the hope of reducing the number of those belonging to the latter tribe, we, at indiantelevision.com, decided to put a display of firecracker articles for visitors this Diwali. We have had many top journalists reporting, analysing, over the many years of indiantelevision.com’s existence. The articles we are presenting are representative of some of the best writing on the business of cable and satellite television and media for which we have gained renown. Read on to get a flavour and taste of indiantelevision.com over the years from some of its finest writers. And have a happy and safe Diwali!

    Written By Thomas Abraham

     

    Posted on 28 April 2008

     

    The Indian Premier League (IPL) has got off to a solid start. The ratings have been positive and crowds have thronged the stadiums. For Sony the IPL marks their return to cricket. Set India CEO Kunal Dasgupta offers Thomas Abraham and Ashwin Pinto his views on what he expects IPL to do for the game, telecast channel Max, as well as the importance of sustaining the brand. Excerpts:

     

    As a broadcaster what do you expect?
    T20 is a made for television format. When India played a T20 match against Australia at the Wankhede stadium, ratings touched 20. I am looking for a rating of 4 or 5, which is possible, given that ICL, which has retired players, got 2.5. This is a good base for us to take off from.

     

    The format will mean that besides country against country, one will also view it as being team versus team. This is what exists in other sports like soccer, hockey, and baseball.

     

    IPL is being pushed as being the ultimate in reality television. In that case how do you get that competitive environment?
    The prize money (Rs 48 million goes to the winner) will ensure this. This is much more than you get for playing for the country and so the players will go all out. The matches will be hard fought. Here all the teams are evenly balanced and so you do not know the result. It will be unpredictable and matches will go down the wire. All teams have a good mix of batsmen, bowlers and youth.

     

    What are you hoping for in the first year as the telecast partner?
    Ideally I would want the IPL to be a successful brand that has a long term play. After June, I will continue to do promotions to keep the team brands alive. This was one of the conditions on which we bid.

     

    We will do shows around the IPL. You could see teams (franchises) practicing and discussing strategies for the next season.

     

    ‘The trick for us is not getting ratings for the first season. The challenge is to sustain the excitement after that’

     
    But wouldn’t an ideal situation be for a franchise to build a brand without the big names who might be on national duty?
    This might happen. Apart from April-May, you cannot have another period where all the stars are available. What will happen is that once the league is built the new players who are playing will become the core. You can then have matches in different parts of the world to popularise the game there using these new players.

     

    The trick for us is not getting ratings for the first season. This will happen as a matter of course because of the way the IPL has been hyped. The challenge is to sustain the excitement after that and it is here where we will have to take a leaf out of the book of the EPL. Teams have marketed themselves and have thus become iconic brands.

     

    So Mallya for instance, will use the Royal Challenger brand name to go out there and create opportunities for exhibition matches. They can do charity work in Bangalore and build a fan base. Each franchise will have its own website where clips will be available. They can create merchandise.

     

    Sony will pitch in through magazine shows. Otherwise it will just be a flash in the pan. As we come closer to the next season you will see transfers and there will be speculation.

     

    New heroes will be born. It is possible that the likes of current heroes like Glenn McGrath, Kumble, and Saurav will not play beyond two seasons. Once that happens, then the brand will live outside the big names.

     

    One of the aims is to broaden the viewer base is to get in more children, women, But for that you have to create marketing that speaks to those demographics. What is Sony planning?
    One of the major attractions will be the presence of big Bollywood stars. Akshay Kumar will perform for Delhi. SRK will perform for Kolkata You will see proper Bollywood entertainment.

     

    We have even tweaked the timings of some of the matches to accommodate our entertainment specials. One match was supposed to start at 4 pm but we have pushed it back to 5:30 pm. We will even have stand up comedy for Extraaa Innings. On air we have gone in for fresh faces. We did not want Mandira (Bedi) for this. She is more suited for ODI cricket. I want 20-year-olds in T20. We also did not want Kapil Dev, Gavaskar. We wanted anchors who represent today’s kids. With the ICC World Cup we broke the mould and brought in females. Now we are breaking the mould back

     

    What is the distribution upside from IPL?
    This is a question mark. We are supposed to have a dip but we will retain the same level. There is no minimum guarantee now. Had Ten Sports still been present it would have been difficult to determine the value of IPL. Our team is happy as they are closing deals for the year and it is one of the distribution cornerstones.

     

    At $ 59 million in Year 1 and an average of $ 61 million over five years, IPL was literally sold at floor price. Wasn’t that a great deal?
    It was. Most of the payout ($ 612 million) is from the next five years. ESPN’s bid was $150 million for the first five years. They had put in conditions that the top players should be there. We did not put in any conditions.

     

    Anyway, the way it has turned out, all the top players are taking part.

  • We expect ICL to break even in two and a half years

     

     
    ‘We expect ICL to break even in two and a half years‘

    When Zee launched the Indian Cricket League in the face of a take-no-prisoners campaign of opposition from the Board of Control for Cricket in India last year, there was scepticism galore on whether the Subhash Chandra-backed league would bat it out. Particularly after the the BCCI announced plans for its own league shortly thereafter.

    ICL, however, successfully staged two events despite all the hurdles thrown in its way. The Indian Premier League kicking off on 18 April notwithstanding, Zee Sports business head Himanshu Mody is confident that his cricket endeavour will hold its own.

    Indiantelevision.com‘s Ashwin Pinto caught up with Mody to ascertain his views on the progress made and future plans.

    Excerpts:
     

    Firstly, congratulations on having been able to deliver the second edition of the ICL despite the best efforts of the BCCI to skewer you. How has the experience been different from the first edition?
    It was much better. The first one was with six teams in one venue. There were 20 games. For the next event we added two more teams and had three venues. Lahore came from across the border. The event was held on a larger scale.
     

    What were the learnings from the event that you will take, going forward?
    We learn every day. Despite the pressure and resistance that we face, I think that we are set on a path to success. We have good players and have built on the ground infrastructure. We have 250 members, 80 of whom are Indian players. The rest are foreigners – coaches, players support staff, etc.
     

    How is the event being expanded upon this year?
    From April to September it is summer and then the monsoon season. There is not we can do in this period. We will hold an event later this year. We could include ODIs as well. We had a non televised ODI tournament in January which was played in Chennai and Hyderabad. What we come out with will depend on the commercial viability.
     

    How succesful have you been thus far in infrastructure and grassroot talent development?
    The Indian players come from various small towns and cities like Jammu, Srinagar, Assam, Indore and Bhopal. The Indian players come from 58 cities. We have a diverse mix in this sense. We also have talent scouts in each Zone where they have gone out to find emerging talent. We will now be setting up a central Academy for our boys.
     

    A notable feature this time round was that there was an increase in spectators in the stadia. Has some sort of a spectator/viewer connect with the state teams happened?
    This is starting to happen. The event is a family viewing experience. People are supporting the local team. In the final, Hyderabad Heroes had a lot of local support. At the same time support depends on performance as well, which is what has hampered Mumbai.
     

    Simulcasting the event on Ten Sports and Zee Sports has ramped up viewership quite significantly. What have been the average combined ratings? Have they been up to expectations or have they exceeded your brand partners‘ expectations?
    The ratings have exceeded our expectations. We managed an average of 1.5. Ratings peaked at 3.5, which is more than India Test cricket and some ODI ratings.
     

    Was it a challenge to get sponsors on board given the BCCI stance?
    The establishment tried everything they could to prevent us from getting a start. They tried to resist sponsors from coming on. Also, to be fair, for the first event sponsors were reluctant as they did not know what to expect. The first event was a solid start.

    The second event has been a big hit and on the back of that we launched a tri series between an Indian XI and a World XI. We sold most of our inventory for this. The likes of Pepsi, HUL and Vodafone have come on board.
     

    And what of the other cricket boards? Do you see a softening of their stances vis-a-vis the ICL and what could be the catalyst for it?
    The other cricket boards have to realise that more than ICL, it is the IPL that presents the biggest threat to them. I think that they are starting to realise this. We do not ask any existing players to break their contract. At the moment the IPL presents that dilemma to current players as to whether they should play for their country or IPL club. We have taken players who are on the fringe or who do not have a central contract with their respective boards.

    The international governing body needs to take a call on what is more important. In soccer for instance, club soccer contributes more revenue as opposed to countries playing against each other. Cricket must decide if it wants to go down this route. If that happens, then country versus country matches will have to come down. If, however, it decides that the country format is more important, then the IPL could be limited in terms of matches played.
     

    How has ICL fared businesswise? Could you offer any idea of the kind of investments that have been pumped in?
    I cannot talk about numbers. However the business is robust. Earlier when we started this last year, we had given ourselves a breakeven period of three years. Now we expect that to happen in two and a half years.
     
    ‘The other cricket boards have to realise that more than ICL, it is the IPL that presents the biggest threat to them‘
     

    Where have the revenues come from and how does it compare with the inaugural edition?
    We have several revenue sources. We have ground sponsorship, associate sponsorship, ticket sales sponsor, advertising on television, broadband rights.

    ICL was aired in several countries including UK, US, Pakistan, the Middle East, Africa, Southeast Asia, Australia and New Zealand. We did deals with international broadcasters for ICL including Showtime in the Middle East, Starhub in Singapore and Astro in
    Malaysia.
     

    The ICL is unique in that everything – whether it be telecast rights, teams, stadia – is owned by the promoters. Therefore, by extension, it‘s Essel that has to spend on development, promotion and marketing of every aspect of the event. With IPL as a rival, in effect you‘re confronting the power of 10 – not just a powerful cricket board but eight strong franchises as well as an established television network for share of mind. Doesn‘t that become a huge challenge?
    We took satisfaction from the fact that the IPL format has duplicated ICL. The economics of the whole thing differs from product to product. We knew what the marketing plan would be and what would be enough to cover the country. We are on track. If we incur all costs and do it ourselves, then all revenues belong to us. We do not have to share them with anybody on a
    80:20 or 60:40 basis.

    If there is no India cricket in a certain period, then the ICL becomes a strong proposition. If you can have many news channels, I don‘t see why two leagues cannot co-exist. We can have as many events as we like with all our players.

     

    Actor Mithun Chakraborty has picked up a stake in the Kolkata ICL team. What are the future opportunities for stakes in teams?
    We are talking with a few corporates. We chose not to sell teams initially as we wanted to show people the value that we bring to the table and what our delivery is. Having done this, we can now command a premium for our teams for strategic partners. It is not just a question of money. We are looking for partners who share our vision and who can bring synergies to the table that will help the ICL grow.

    We will, therefore, be selective about whom we choose to partner. We need to know the drive they have and what their objective to invest is.
     
    With the BCCI‘s league being launched next week, what impact will this have on ICL in terms of retaining both local and international talent and viewer interest? In the present context, the ICL has a shelf life as a low-cost, lower value alternative to the IPL. But if these eight franchisees are going to expand in a big way, what will be left over for the ICL to pick up might just be the crumbs. Are some of these fears being expressed?
    I don‘t think that it is a fair comment. There is enough local and international talent to go around. We have contracts with our players and I know that the satisfaction level they have is high. We are a closely-knit family. I don‘t see substantial movements
    happening.

    A mature sports market allows for trading, though. The players have contracts with us and if somebody wants them, then they will have to pay us accordingly. That is how sports clubs operate globally. A player cannot simply break his contract. Our stated objective has been to have talent at the grassroots level. So we did not go out and try to get the likes of Sachin, Dravid.

    What we do is in line with what Zee does if you look at shows like Sa Re Ga Ma or India‘s Best (Cinestar Ki Khoj). We short-listed 15 Indian players who we felt were the best. They played in the tri series. The fight they showed was commendable against a global bowling attack.
     
    The flip side to ICL is that many cricket boards, including Pakistan, are peeved that cricketers were taken. Do you feel that this will negatively affect your ability to go after their TV rights?
    I do not think that there is a conflict over here. The businesses are separate. If our bid is the highest, then it will come to us. A good price is what any board would look for. The best man wins. I don‘t think that the board will be concerned about who offers the
    highest.
     
    How is the relationship with Ten Sports working out?
    We have been partners for a year and a half. It is working well. There is content sharing. We distribute Ten Sports. They handle our ad sales. The FPC is made by a central team. If there are clashes, then the programmes get split between the two channels.

    The Uefa Champions League sometimes has two games at the same time. So we air one match. In fact, we started doing this before we partnered with them. This offers the power of two.
     
    You are also doing an initiative Goal 2010. How did this idea come about and what progress has been made?
    This came about when Fifa president Sepp Blatter came down to India. This sport has a huge potential. We are putting money into this sport and in a couple of years, we will start seeing the results. We do a lot of school soccer tournaments.

    Our focus is at the grassroots level. We need to emerge as champions at the Asia level by 2010. We should be among the top five teams in Asia. Ten Sports airs domestic football in the Middle East. We are also working with the AIFF at tweaking the format of domestic football.
     
    Is the appeal of soccer moving beyond the three states of Goa, Kerala and West Bengal?
    Yes. It is getting popular in parts of states like Gujarat and Maharashtra.
     
    Do you think corporatisation will help sports like soccer and hockey to move forward?
    It can certainly help soccer. Hockey, however, is on a downturn not just in India but also abroad. In soccer, you have 32 teams playing the World Cup. In hockey just seven or eight teams play the event. Even in those countries the popularity is not as high as it should be.
     
    How is Zee Sports faring on the distribution front?
    The ICL has done us a lot of good. We have achieved 50 per cent connectivity. This rose from 25 per cent over the last three months.
     
    What property acquisitions were recently made?
    Zee and Ten Sports acquire things together. We renewed the West Indies cricket rights. We have the US Open tennis event for the long term.

    India is a unique country in that there are several sports channels but only one sport dominates. In other countries there are only two sports channels but multiple sports are followed.

    This is why the price of rights are going up dramatcially in India due to
    competition.
     
    Finally on the advertising front brands at the moment are not sure about how to use sport beyond cricket. Do you see this changing in the near future?
    It is changing already. A lot of advertisers are going to Golf. Once the Indian advertisers start to understand the true value of sponsorship that goes beyond just TRP, things will change. The best example is what the EPL has done for Barclays.

    This, though, has been built over several years. Indian companies are realising that they should invest in sport over a long term. The advertiser has to invest with the sports federation.

    should invest in sport over a long term. The advertiser has to invest with the sports federation.

    competition.
     
    Finally on the advertising front brands at the moment are not sure about how to use sport beyond cricket. Do you see this changing in the near future?
    It is changing already. A lot of advertisers are going to Golf. Once the Indian advertisers start to understand the true value of sponsorship that goes beyond just TRP, things will change. The best example is what the EPL has done for Barclays.

    This, though, has been built over several years. Indian companies are realising that they should invest in sport over a long term. The advertiser has to invest with the sports federation.

  • IPL is the name of the game

    Three decades after Kerry Packer revolutionised cricket with the World Series, cricket stands on the threshold of another potentially disruptive revolution. On 18 April, the Board of Control for Cricket in India (BCCI) will unveil the Indian Premier League (IPL), a format the Indian board hopes will change the way Indians watch the game.

    Instead of cheering the country, one will cheer city-based leagues. Eight teams – Jaipur, Mumbai, Mohali, Chennai, Hyderabad, Kolkata, Bangalore and Delhi – will take the field.

    Can this work? The answer is yes if one looks at the experience of the first mover in India – Essel Group’s Indian Cricket League. The ICL is currently holding its second event and is getting good visibility as matches are also being aired on Ten Sports. The on-ground attendance has also been decent, showing that if an event is well marketed there is scope. Considering that ICL has managed all this in the face of a take-no-prisoners onslaught by the Indian cricket board, what the officially sanctioned event might well deliver boggles the mind.

    One must also note at the outset that IPL and ICL are possible because of the success of the T20 format. Initially there was some cynicism even within the BCCI as to how the new format would fare. The T20 World Cup, though, changed all that. With India winning, the viewership grew and the final scored a ratings of 9.81 TVR (Tam data, C&S 4+).

    Broaden the game’s appeal: The aim of the IPL is to broaden the appeal of the game. Since matches will take place in the evening, the hope is that families including women and children will turn up in large numbers.

    The IPL has also brought corporates closer to the game. Companies like Reliance Industries now own a team. This is expected to inject professionalism and also entrepreneurship. The larger aim is to push cricket at the grassroots and domestic level.

    The IPL is conceived as a city-based league format. With the base price set at $50 million for the city-based franchisees, the teams were bought for well above that.

    The prices paid show that after a lot of due diligence, corporate India views the IPL as being a serious business venture. Reliance Industries, for instance, paid $111.9 for Mumbai while Dr Vijay Mallya’s UB Group shelled out $111.6 million for Bangalore.

    The IPL will have flair and flamboyance when you consider that Bollywood also got into the act. Shah Rukh Khan paid $75.09 million for Kolkata. Preity Zinta took Mohali for $76 million. On the other side, we have Emerging Media, an expert in organising sport, paying $67 million for Jaipur.

    The broadcaster’s viewpoint: The BCCI hit the jackpot when the Sony-WSG combine bought the ten-year broadcast rights to the IPL for $918 million. Compared to this, the price that ESPN Star Sports (ESS) paid for ICC rights looks like a good bargain.

    While many have questioned the financial wisdom of such a huge payout for an as yet untried format, the numbers do not look quite so daunting when the fine print of the deal is examined. The guaranteed payout commitment by Sony-WSG is $306 million for the first five years. The remaining $612 million, to be paid out in the second half of the deal, comes with an exit clause built in.

    Sony president network sales, licensing and telephony Rohit Gupta is gung ho about the IPL, noting that T20 is the game’s future. “If you see the scene for the last four years, ratings for ODIs have been steadily falling. T20 brought the game back in a big way. The stickiness is far higher than it is for the other forms of the game.”

    Marketing is of paramount importance: The main challenge for IPL is for the franchises to build up fan clubs. After all, Indians are not used to cheering at a local level. As Gupta notes, the key challenge for each of the franchisees is getting fans of that state to identify with the team.

    The first step in that direction was to have names that reflect the city. So Emerging Media christened the Jaipur team as Rajasthan Royals. The aim is to convey the pomp and regal splendour of the city.

    Reliance has called their team Mumbai Indians to show the character of this city. They, like the other franchises, will run a 360-degree marketing initiative with a strong local flavour.

    Glamour is also an important quotient in the marketing strategy. Cricket and Bollywood are two religions in India. Mix them and the result is potent. For instance, Bangalore has roped in actresses Katrina Kaif and Deepika Padukone for a music video to promote their Royal Challengers.

    A push for domestic talent: One of the great things about the IPL is that it gives youngsters the chance to prove themselves. At the second auction, a draft for the Under 19 was held. This was to ensure that in a few years time India will have a young talent pool who are experts in this format of the game.

    RoI: There are several revenue streams available for franchisees. There are central revenue streams, which include a share of the TV rights. The franchisees will get 80 per cent of TV revenues in the first five years and 60 per cent from the next five. They will also get 60 per cent of sponsorship revenues. The franchisees get all local revenues.

    The revenue will come from many sources including gate revenues, franchisee shirt sponsorship, local sponsorship, licensing programme and uniform merchandising.

    Reliance and Emerging Media are looking at a three-year time frame to break even. If, however, the IPL takes off, then that period could be sooner.

    Gupta adds that corporate involvement is the best thing that could have happened. “Now you will see more accountability from the players. If a corporate house has paid over a million dollars for Dhoni, then he better perform. It can no longer be a case of doing well in one match and taking it easy for the next three.”

    Performance is key in brand perception and each franchise will be doing its utmost to ensure that perception is not hurt by a lack of on-field performance.

    Infrastructure will get a boost: Corporates will back infrastructure creation like academies and training camps since these are the places where talent will bloom.

    Mindshare’s Hiren Pandit says that Deccan Chronicle is looking at grassroots activities. There are plans to take this concept to schools and colleges. Therefore, there is a larger picture at stake.

    A mix of caution and optimism: As far as advertiser interest is concerned, DLF, which lost out on the franchise bid, has taken the IPL title sponsorship. Hero Honda is the co-sponsor.

    Sony Entertainment Television (Set) India, which has telecast rights for the matches, has closed its advertising sales. Set India CEO Kunal Dasgupta says ad sales revenues have already crossed Rs 2 billion.

    Pandit says that companies that get involved with the IPL early will reap the benefits in the long run. When asked about the mix of sports and entertainment, he says that for IPL it is important that while the entertainment quotient like the opening ceremony is good, the cricket played should be serious.

    “It should not be treated as a tamasha. Otherwise you lose out on both,” warns Pandit.

    Lodestar Universal CEO Shashi Sinha, though, has doubts over whether the high rates of sponsorship are worth it for clients. In his opinion, it might be over-priced. “If the IPL does not live up to expectations of advertisers, there will be losses,” he cautions.

    IPL could boost globalisation of cricket: What IPL might do is globalise the game. T20 is, in fact, the best way to get new countries like China involved with the game. Since it is only three hours long, it is easier to get new audiences to sit through it. Adam Gilchrist seconds this view saying that it is important that other nations start playing the game.

    Gilchrist also says that IPL should be given time to grow. It is important not to be pessimistic about it straight away. One will get an idea of how it is faring after a few years, he adds.

    Conclusion: BCCI VP and DLF IPL chairman and commissioner Lalit Modi is very confident that the IPL will mark the dawn of a new era in Indian cricket. One would, however, be better served by not getting bowled over by all the hype and hoopla that is surrounding what could well be termed the ‘gentleman’s game’ on steroids. The maidens may be bringing in sex appeal to the new format but how the event fares over the next three years will be the real test to assess where the IPL, and for that matter ICL, stand.

  • Prasar Bharati gets Rs 3.3 billion loan to set up broadcast centre for Commonwealth Games

     

    NEW DELHI: Prasar Bharati is to get a loan of Rs 3.26 billion towards setting up an ‘International Broadcasting Centre’ and other facilities as a host broadcaster for the Commonwealth Games 2010.

     

    This is in addition to the grant-in-aid to the tune of Rs 11.42 billion, according to the Union Budget for 2008-09 presented to Parliament today by Finance Minister P Chidambaram.

    The loan will also be aimed at meeting the capital expenditure of the public service broadcaster.

    In a major decision taken during the presentation of budget for 2000-2001, the then Government had announced that since Prasar Bharati was an autonomous organisation, it would only receive grants-in-aid and loans from the total budget of the Information and Broadcasting ministry.

    This year’s loan is almost two times the revised estimate of Rs 1.67 billion (as against the allocation in the budget of Rs 2.17 billion) in the Budget for 2007-08. Similarly, the grant-in-aid last year was Rs 10.87 billion.

    The total budget allocation for the I&B ministry in the Budget for 2008-09 is Rs 19.10 billion as against Rs 16.10 billion in the revised estimates for 2007-08.

    There is a marginal increase in the allocation for films from Rs 718.5 million in the revised estimates for 2007-08 to Rs 848.5 million in the Budget presented today. In addition, there is an allocation of Rs 46.6 million for film certification. The budgetary allocation for films is aimed at covering the Films Division, the Directorate of Film Festivals that organised national and international film festivals, the Children’s Film Society, India, and the training institutes in Pune and Kolkata.

    The National Films Development Corporation, which recently resumed investment in film production, is to receive a loan of Rs 80 million.

    While the ministry had only used Rs 501.4 million of the budgetary grant of Rs 848 million on advertising and visual publicity during 2007-08, the allocation has been raised to Rs 743.6 million in the new budget.

    Interestingly, the allocation of Rs 358.5 million for Press Information Services includes funds for a subsidy for running India’s news pool desk of non-aligned news agencies pool through the Press Trust of India despite the fact that the news pool has been non-existent for several years.

    Though Chidambaram said the Northeast would continue to receive special attention, the lumpsum provision for projects/schemes for development of the region and Sikkim has come down from the Rs 190.2 million (as against the Rs 205.2 million in the budget for 2007-08) to Rs 179.6 million in the new budget.

    There is a provision of Rs 30 million to the Electronic Media Monitoring Centre for monitoring TV channels and radio stations for violation of programme and advertising codes. The provision in the budget had been Rs 59 million but the EMMC had used only Rs 30 million, according to the revised estimates for 2007-08.

  • ‘Why would BCCI want its biggest new property on a new channel?’ – Kunal Dasgupta

    ‘Why would BCCI want its biggest new property on a new channel?’ – Kunal Dasgupta

    For Sony Entertainment Television (Set) India CEO Kunal Dasgupta, the big wish for 2008 is to throw up that one hit narrative show that would get some momentum going for his network’s flagship channel Set. Other than the vexed issue of Set and its equally struggling Hindi GEC sibling Sab, the network is doing fine thank you, argues the long serving head honcho of the Indian broadcast operations of Sony Pictures  In conversation with Indiantelevision.com recently, Dasgupta looks back on the difficult year that was 2007 and offers some pointers to the strategic direction Set India (now renamed Multi Screen Media Private Limited) is looking to take in 2008 and beyond.Excerpts:

    Let’s start with the new name. Is this because your parent Sony Pictures Entertainment is distancing the Sony brand name from the Indian broadcast entity?
    Certainly not. The name is reflective of the company’s evolution from a pure television broadcaster to a multimedia one. We want to be on all screens that are video enabled. Going forward, we will be actively investing in mobile, movies, Internet, and out of home screens. Mobile in particular is going to be a focus area for us.

    When you say you want to be on all screens, could you elaborate on that?
    I am going to be recycling the over 30,000 hours of television content and 750+ movie titles that I have with me. We plan to repurpose a lot of it not just across the different screens, but across networks too. The realm of exclusivity is no longer the norm. To stay ahead of the game you have to be focused on how best to leverage the content that you have.

    Like the Rs 40 crore (RS 400 million) deal you did with Peter Mukerjea’s INX for 60 movie titles?
    Yes. That deal entitles INX to three airings of each film I have syndicated to them.

    Looking back to 2007, how would you rate the performance of the channels in the Sony network?
    Well, Max was fantastic; Pix became viable. On Sony and Sab we have suffered reverses on account of our fiction programming not working.

    And looking ahead into 2008?
    The business paradigm is changing and we are at the forefront of that. You could say we are the catalysts for change. Syndication, mobile; these are going to be areas that will explode. The one who reads the writing on the wall and adapts will survive.

    How has the year been in terms of revenues? The perception in the market is that Sony had a terrible year?
    If you add up ad sales, distribution and our international business, it would be Rs 1,200 crores (Rs 12 billion) overall, so you can’t say it was a terrible year.

    One reason for the perception that Sony had a lousy year, aside from its programming not working, was the ICC World Cup debacle in March. We understand you lost some RS 800 million odd due to India’s early exit. Comment?

    The ICC rights should not be looked at from the results from one tournament, but on how it delivered over four years. And it delivered on every count for us.

    Looking at the larger perspective, what have been the big challenges the broadcast sector faced and will face, going forward?
    The pathetically slow pace of digital rollout (Cas) has been the biggest challenge for existing players. Though I do believe digital distribution will come into play from 2008 onwards.Combating all these new players will be the big upcoming challenge. The (leadership) pecking order will have to be reestablished. Star is not complacent in its position of number 1. Even Zee as a challenger is not complacent. Everybody will face challenge. The whole media business will face challenge.

    The industry is seeing huge churn now. The channel explosion is going to further fragment audiences. We will soon have 9/10 channels in each of the genres – news, sports and movies.

    You say pathetically slow digital rollout on the cable front is the biggest challenge for the new players as well as the existing players. But if we look at 9X, the numbers they are drawing are not due to cannibalization, but due to new viewers?
    It’s not cannibalization of GEC but other genres like music.

    So you don’t believe that people have an inherent desire to consume entertainment content but may have been tuned off by the lack of variety presently on offer so they are trying out channels like 9X?
    It’s not just 9X. Even Bindass is getting new viewers. 9X is making a lot of noise but give me a name of one show that stands out. On NDTV Imagine also, nothing will stand out.

    What do we have in 2008? BCCI’s Indian Premier League will take off and what else?
    I don’t know on which channel it will take off. I hope it is on ours.

    But as you yourself said, there will be new sports channels launching and we should expect bids from new players?
    They can of course bid but why would BCCI want its biggest new property on a new channel? Its not just money, they (the cricket board) have to make it successful.

    We do have an example of Ten Sports, which launched with World Cup Soccer in 2002?

    There were only two channels – ESPN and Star Sports – then. Today there are seven channels (DD Sports, Ten Sports, Zee Sports, ESPN, Star Sports, Star Cricket, Neo Sports). Additionally, Max is half a sports channel.

    Each time you launch a new channel, the space will get further fragmented. There is too much out there. There is going be a blood bath.

    What about a platform proposition, like in the case of Sky in the UK? For a rights holder, could IPL potentially become as critical as EPL was to Sky?

    Firstly, in India no exclusivity is being allowed. Secondly, the new guys bidding for the rights are channels which are not yet launched. If platforms like Dish TV or Reliance were to buy the rights, then I would understand but the guys buying are unknown people. They are all startups. They are doing it for their business valuations. They are not bothered whether IPL succeeds or not. Whereas BCCI wants IPL to succeed. IPL will collapse with new players.

    Coming back to the year ahead, how do you see 2008 for your network and the industry?

    As far as the industry is concerned, we would want to see the Reliance launches happening. It’s a very big thing. Then IPL should succeed. New players should enter digital distribution in the cable front. More people are required, more funding is required.

    As for ourselves, we will take some other new initiatives and continue to build our business. We need one hit show. Saat Phere was the starting point for Zee. I need one hit show from Monday to Thursday. That is my perspective. I have no problem in any other area of my business except that. We need to build up, which is not happening.

    Each channel is doing its own thing and so are we. In the meantime, I am doing syndication and international distribution. I am doing everything right except getting that one hit show.

  • ‘Sports broadcast ad market to grow to Rs 7 billion this year’ : Rukin Kizilbash – Taj Television India GM

    ‘Sports broadcast ad market to grow to Rs 7 billion this year’ : Rukin Kizilbash – Taj Television India GM

    It has been a busy and somewhat testing time for Ten Sports. Last year Zee took a 50 per cent stake in its parent Taj Television while this year the channel has had to make do without any India cricket showcase. As a result, it has had to push other properties.

     

    Additionally, a plethora of cricket rights that it holds come up for bidding in the coming months. Indiantelevision.com’s Sibabrata Das and Ashwin Pinto caught up with Taj Television India GM Rukin Kizilbash to find out more.

     

    Excerpts:

    How has not having India cricket this year impacted Ten Sports?
    It has impacted us quite a bit. It is a fact of life that things are not as smooth without India cricket. For each India series you make in the region of Rs 700 million to Rs 1 billion. Last year, Ten Sports had one series. The year before, there were two.

     

    However our reach and GRPs have not been impacted. This is in part due to WWE (wrestling). Our reach is at 30 per cent.

     

    Next year should be better though as we will have India’s tour of Zimbabwe and Sri Lanka.

    But wouldn’t it be a crucial phase for Ten Sports as two prime properties – Pakistan and Sri Lanka boards – come up for bids next year?
    It will be a crucial 12 months for us as the rights for Pakistan, Sri Lanka and West Indies come up for renewal. But we expect to renew our contracts.

    Will the acquisition price for these rights shoot up with Sony back in the race and the others showing hunger to pocket more cricket properties?
    I don’t think that the acquisition price will shoot up drastically. India, after all, visits them just once in four years. So when you buy board rights, you basically buy one India tour. It is not like the ICC events where India always participates.
    Why is it that you recently bought the South Africa rights for just one year?
    We got the rights for South Africa and Zimbabwe for one year. We will hopefully get these rights for five years once the current period gets over. India visits South Africa in 2010.

    Is cricket saturated in terms of ad rates?
    No! We believe that the spot rate can keep going up. To give you a parallel, in the US a 30-second spot for the Super Bowl sells for $2.5 million. For us it sounds unbelievable but in the US clients like Budweiser and Microsoft are willing to spend $25 million on one match. They create campaigns just for that event. An India series costs $4 million to sponsor. So there is room to grow.

     

    We sold the India Pakistan series last year for Rs 350,000 for a 10-second spot. I believe that ESPN Star Sports sold the final of the T20 World Cup for Rs 750,000 per 10 seconds. The next India versus Pakistan series could see spots sold for Rs 500,000 per 10 seconds – or even more. Advertisers realise that India cricket is the only way to reach the entire country at one shot. Even the highest rated soap does not reach the entire country. Its primary audience is the Hindi belt.

    Which is why the sports broadcasting market is going to see ad revenue growth this year?
    We expect the sports broadcast ad market to be in the region of approximately Rs 7 billion this year, up from Rs 4.5 billion a year ago.

    Industry estimates Ten Sports’ ad revenue to be around Rs 600-700 million this year. Is this true?
    I can’t comment on our revenue figures.

    In terms of rates, how do India cricket series stack up
    against each other?
    India versus Pakistan would be number one, followed by the series against Australia. A series against South Africa would be third. Clients need India cricket to create a big bang. Also a lot of the ad rates depend on when a series is held. Is it coinciding with the summer season or Diwali?

    To what extent did T20 rejuvenate cricket?
    It turned the sport upside down. It is certainly worth a lot more from an advertisers perspective than a 50 over ODI. The ratings for the T20 World Cup were double what you got for the India Australia ODI series. There is a lot more viewer retention as it lasts for just three hours. The instant cricket that T20 offers fits in with today’s lifestyle.
    ‘IPL and ICL will not get in each other’s way. One initiative is from the governing body, while the other is from a private player trying to boost the game’s popularity and reach. They can co-exist‘

    Have ratings gone up for other sports?
    Not substantially. There has been some growth though for tennis, soccer. Moto GP has also shown a decent jump. We have gone from maybe 0.2 to 0.4.

    And what about ad rates?
    We are seeing a surge in football. When we telecast the World Cup in 2002, we got an ad revenue of $2.5 million. We believe ESPN Star Sports got around $8.5 million this World Cup.

     

    The ad revenue you get from a non-India series like Australia versus South Africa is probably about the same as what you make for a season of Uefa Champions League.

    How do you view the opportunities for broadcasters to grow other sports in India?
    The opportunities are there for other sports to grow. Soccer, hockey, tennis are doing quite well, which we are trying to develop. Having said that, Indian cricket drives the sports broadcasting space. The challenge is to take the other sports on par with India cricket.

     

    We have to figure out how to deliver more TRPs and revenues from these sports. India will evolve from being a one sports nation but it will take time – and a lot of marketing effort from sports broadcasters to push these properties.

    Can you offer an example of a non cricket sports event that has grown through nurturing?
    A good example of nurturing is the soccer World Cup. The response it got last year surpassed all expectations.

     

    When EPL first started airing in India not many people were familiar with it. It has developed over the years due to sustained coverage. We will be doing the same with our properties including motorsports.

    What marketing innovations are being done by Ten Sports to push these events?
    We are doing an On Tour innovation. This is a six-month on-air promotion and the sponsors are Tata Sky, Idea and McDonalds. We take four contest winners each month for a different event. We started off in September with WWE in Paris. In October we took them to Kuala Lumpur for the MotoGP. This month is the Uefa Champions League and next month is Sri Lanka Cricket.

     

    In January, we will be featuring South Africa cricket. In February, there will be horse racing in Dubai. And we are marketing them in different ways.

    Do you see Olympics becoming bigger in India this time?
    I would rather say that the Olympics as an event was bigger in the 1970s and 1980s compared to now. For next year I have heard that ESPN is looking to air it, besides DD. If that happens then the event will get a bigger marketing push that usual. Still the fact that Indian participation in the Olympics as well as performance is limited means that interest will accordingly be limited.

    What are the rights you have recently bagged?
    We have bought the soccer rights to the Dutch and French leagues. We believe that if we nurture them they can over the next three years reach the status of EPL.

     

    In terms of upcoming rights, the Australian Open tennis Grand Slam rights are currently being bid for. Wimbledon rights come up next year.

    There is a trend of sports broadcasters doing long-term deals with a few clients. Is Ten Sports examining this route?
    No! We prefer to do yearly deals as we know exactly what is on our calendar. Also if you do a long-term deal, you do not know what the ad rates will be the next year and the year after that. You could be under-selling.

     

    Another issue is that if I say lock in Pepsi for three years, then I exclude Coca-Cola and who knows? Maybe next year Coca Cola ups their marketing budget and launches three new products. I miss out on that action. With long-term deals you run the risk of ticking off companies by blocking them completely off the channel. These companies will then be more than happy to hop on to a rival channel.

    How do you see the ICL and IPL faring?
    ICL will rock. At the moment there is some uncertainty as it is a new format. But once it starts, it will catch on in a big way. You have established names, good production values, good stadium facilities. There will be Bollywood glamour. So it will be a fun experience for the family.

     

    While it is early for me to say anything about IPL, I don’t think that they will get in each other’s way. One initiative is from the governing body while the other is from a private player trying to boost the game’s popularity and reach. They can co-exist.

    After acquiring stake, why did Zee decide to sell ads through Ten Sports for its own sports channel?
    We already have a dedicated ad sales team in place. We are selling ICL for them. We are selling it on air while they are selling it on-ground. Sometimes we package some of Zee Sports’ properties along with our channel. At other times like for Indian soccer, it is done separately.

     

    It also depends on the client. If say someone like an LG is spending Rs 10 million, he may want to split it between the two channels. So we work out a package. We have products that Zee Sports does not have and vice versa. So it helps us sell better. It is a joint effort in terms of sales.

    Are you looking at organising a sports event at a
    grassroots level?
    Yes! We are working with Zee. We have identified three sports and we are deciding how to go about things. We might create an event from scratch or we might associate with an existing one and take it to another level. Zee is working with soccer. ESPN is working with hockey. We too are looking at a sport.

    In terms of other sports, do you see soccer or hockey
    becoming a number two sport?
    It is difficult to say which will come out on top. Hockey has picked up with our recent win and the whole Chak De spirit. Unfortunately, we are not playing in the Champions Trophy. Hockey has had its ups and downs. In terms of soccer, the Champions League is taking off. Both sports will depend on how India fares at them. But currently, soccer is bigger than hockey.

    How is Ten Sports gearing up for new media? And is marketing on the mobile going to go beyond just SMS?
    We are planning to do this next year. We are talking with Idea and Reliance in terms of how to take this forward. We are looking for a bigger platform.

    You did a film innovation last year where you aired
    sports films. Are you planning more of the same?
    Absolutely! We are planning to have the next batch soon. It is a question of getting sports movies. We are currently showing a series Simply the Best. Each episode looks at a great sports person like Sir Donald Bradman, Jesse Owens. Mohammed Ali, Sachin Tendulkar.

    Is a one-sport channel like a Golf channel economically
    viable with new distribution platforms like direct-to-home emerging?
    I think that a couple of years down the line it will be. When DTH reaches 5 million homes, you will see niche channels dedicated to topics like cooking, golf, travel and action adventure coming up.