MUMBAI: The heat is on! With the BCCI scheduled to hold an e-auction for the Indian Premier League in mid-February, K Madhavan, president, Walt Disney Company India and Star India, in a calibrated set of interactions with a number of Indian media outlets, has publicly laid down a marker that the media giant was bullish on retaining its most valuable property. But only in so far as it “fit in with the company’s business plans”.
Sieving the wheat from the chaff in Madhavan’s pronouncements, his key points were:
1. Disney Star is STILL in investment mode vis-a-vis its sports business. For historical reference, it was in November 2013 that then 21st Century Fox owned Star India announced plans to invest Rs 20,000 crore to “expand sports coverage in India”.
Madhavanspeak to Economic Times:
“Sports business for us is in an investment mode and we won’t shy away from investing heavily. We are going to be bullish on all rights renewals. We have over 60% market share in sports, which we want to continue to have.
“Cricket contributes to close to 80% of the Indian sports viewership
“There are three major properties (IPL, ICC and BCCI rights) coming for renewal this year. So, the future will depend on how this is getting distributed and who manages to get what.
“We are going to be bullish on all rights renewals. We have over 60% market share in sports, which we want to continue to have.
“We are investing not only in cricket but all sports.
“Also, we have invested in taking the sports deeper and wider. Today, all the important sports on our network are being telecast in four to seven languages, which I would say, has been a very innovative initiative from our side.”
Speaking to Business Standard, the gist of what Madhavan had to say was that Disney Star India will not indulge in a price war (really?), even though it is looking at retaining the IPL and the ICC, provided they fit in with the company’s business plan (emphasis ours).
Significantly, Disney-Star’s highly overpriced and loss making BCCI rights is apparently NOT on its A-priority list of properties it will go “all out” to retain.
Speaking to e4m, Madhavan says: “We remain bullish about the upcoming media rights. And we will bid till it makes business sense.
“Sports consumption in India is still low compared to international markets. With the right strategy, there is definite scope to further grow the property.”
“We have a long-term interest in sports and digital. Firstly, we are bullish, and secondly, we are passionate about the business. We are currently in investment mode and will continue to grow the sports portfolio achieving our vision to make India a multi-sporting nation.”
NFL analogy (this one SportzPower totally buys in to)
Drawing the analogy of the NFL in the US, Madhavan told e4m there is further scope for the sports segment to flourish. “In the US, close to 50-60% of people watch the NFL, compared to that, we have a very small share, but it is expanding. The IPL is a classic case and our commitment transformed IPL and contributed to the massive growth of the league, making it one of the world’s most lucrative sports properties. IPL’s viewership has grown 4X since we took over. That’s a big move. We are bullish on the sports vertical and we continue to be bullish on the investment. (Referring back to his comments to BS as too e4m, the billion dollar question is of course – ‘What is the outer limit as far as making business sense is concerned for the Disney network.’)
Regional language push
“Regionalisation has also played an important role in taking sports properties deeper and wider across India. Today more than 80% of the consumption of cricket is in local languages, about 60% in Hindi and another 20-25% in Telugu, Tamil and Kannada. In the case of football, Bangla and Malayalam constitute almost 70% of the total consumption of ISL. That’s how much affinity there is for regional broadcasts of sports.”
Scope for Consolidation
When asked if the media sector is headed towards consolidation, Madhavan says, “There are three or four major players at the national level. Entering the OTT or TV space at the national level involves huge costs hence consolidation is bound to happen. This will lead to healthy competition, which will be good for the industry and the audience will get quality content. In fact, it’s already happening – the production quality, technology, innovation and animation are close to international standards.”
