2006 has been a rocky year for sports broadcasters. Cricket properties were acquired at humungous prices, SET India decided to walk out of bidding wars, Harish Thawani made his entry into the broadcasting arena and Zee bought 50 per cent in Ten Sports.
ESPN Software India MD RC Venkateish offers his views on the consolidation in sports broadcasting, the challenges broadcasters face in pushing sports other than cricket, the need to come out with sports entertainment programming, and the Cas issue.
Over the past few years we have seen a proliferation of sports channels but 2006 was a year when we saw consolidation. You had Zee buying a stake in Ten Sports while Sony opted out of sports. Nimbus is also in the process of aligning itself. This happened because earlier you had an unsustainable situation where a lot of people jumped onto the sports bandwagon thinking that it was an easy play.
People have realised that it is not that easy to run a sports channel. This is because of the kind of skill sets that are required, the capabilities that are required and also the kind of investments that need to be sustained.
Going forward you will see moderation in the sports business. You will see the crazy escalation in rights prices starting to cool down a bit. People are starting to get more realistic. In terms of overall developments of the business, consolidation is good.
You earlier had smaller players jumping in and bidding the rights prices to crazy levels. There was a destabilising factor in terms of asset valuations. When asset valuations reach a ridiculous level you are bound to have a correction. This sort of a boom-bust cycle is not good for anybody’s business. People who tried to take acquisition prices up, have realised that it is not an easy game to play. Now the players who are standing are serious and committed. The environment is stable with players who are in it for the long haul and looking to increase their brand equity rather than a quick fire in and out situation.
Consolidation means that the model of let me set up something sell it and get out is gone. A stable environment will allow the players to invest in broadcast quality, programme content. We can focus on better quality of coverage for the viewer rather than saying,”Hi I am blowing your brains out on the rights acquisition costs.” From a five-player field it has been reduced to three and possible eventually to two.
Sports Entertainment
Sports is entertainment. There are wrap around shows around content. What we have sought to bring to the viewers is 360 degree spectrum of sports. We have always had magazine programmes, informative shows. We recently launched a lighthearted programme revolving around sports. The main theme, though, will always be live sports. Around that we try to build properties and shows. Anything that seeks to enhance the understanding of sports and inform the viewer provides a different angle.
This space needs to surround the live programming. It cannot act as a substitute. As an exclusive standalone as a channel or as a genre I do not think that sports entertainment will have any legs. Recently, one of the players launched a live sports channel and another channel on sports entertainment. Yet if you see the second channel it too has live sports. They probably couldn’t find enough software. That is not to say they will not create software but it is important to find a proper balance. At ESPN we have added concepts like dream job, Full Toss to the live experience.
Sports federations need to get their act together
International football is doing well with the soccer World Cup and English Premier League. The World Cup gave ratings that have not been seen for a non cricket sport. We had all India ratings of 2.6 and 3.1 for some of the league games. Unfortunately, the ratings for the rest of the stuff has been middling. That has to do with the lack of performance at the international level by sportspeople. I remember that two years ago when Sania Mirza came to the third round of the Australian Open the ratings shot up to 1.1.
Unfortunately she has not been able to maintain that sort of form and the ratings have dipped. Premier Hockey League has given us ratings but because the national side has not been performing their matches have not fared well. Unless you perform at an international level it is hard to capture the imagination of the public.
People want to emulate winners not losers. If you do not do well then there is no new pipeline of young talent who wants to play the sport. Eventually the sport dies out. We are doing our bit to push hockey and soccer. Having said that, sports federations need to have a deep, hard look at themselves. People need to fundamentally overhaul the system. Otherwise it is not going to go anywhere. It has been like this for the last 40 years. It will be like this for the next 40 years. Cricket at the moment does not face challenges. You have a good set of players as well as youngsters who want to take it up. So the pipeline is active.
Certainly in other sports when it comes to marketing it is a challenge. With hockey we have to fight the dice a little bit as the national team’s performance has been bad. If India had won the Asian Games or even finished as runners up, there would have been a positive groundswell of support for the game. Marketing is a lot easier if the national team is doing well. Hopefully, people will put the bad performance of the Indian hockey team behind them and watch PHL for the love of the game itself and not for the satisfaction of one team beating another. In the UK local soccer league games have more viewership than some international matches.
2007 A big revenue boost for sports
Sports is event driven. You have the cricket World Cup coming up. So there will be a boost. Then there is the 20/20 World Cup in September. India goes to England and to Australia. We also tour Pakistan. So there is a fair amount of cricket. It compares favourably to this year when there was the soccer World Cup and the Champions Trophy.
Distribution
DTH has been around for quite a while and is a good development. It offers an alternative to the consumer and it is digital telecast. It is good that sports are airing in a format that is clearer to see. We welcome Cas from a technology perspective. The only thing that we are unhappy about is the kind of price regulation that has been forced down our throat. We will get 45 per cent of Rs 5 per subscriber, which is two rupees and forty-five paisa. This is absurdity that defies even basic, cursory logic. It is extremely unfair and we have already appealed to TDSAT. It has always been seen that free market forces are the best even for the consumers eventually.
To interfere with that is always going to be a recipe for disaster. DTH and Cas address single subscribers and provide content for that subscriber. We are already providing interactive services to both Dish TV
and Tata Sky. This allows viewers to check out rolling highlights, players statistics, different camera angles. As the transponder capacity goes up, it will afford the opportunity for more data. We have the rights for Euro 2008 and so the DTH service providers will probably come to us to see if we could do something with them.
