MUMBAI: Along with a report on Sports and its symbiotic relationship with the Media and Entertainment industry KPMG marked a detailed study on how cricket has dominated in India as compared to viewership shared by other sports. The India Premier league (IPL) has been stated as one of the main reasons to boost the viewership rating in the report presented at the inaugural function of FICCI Frames 2009.
Going by the response generated in its inaugural edition, IPL seems to have truly redefined the concept of sports in India. In a country where cricket is already considered to be a religion, the domestic Twenty20 tournament further added to its popularity by providing a judicious blend of the game, celebrities and entertainment. In the process, IPL presented cricket as a complete entertainment package, and arguably succeeded in attracting new viewers segments into the game’s fold.
According to the report, the game provided a big boost to the advertising industry. According to estimates, IPL is expected to bring in Rs 11.9 billion every year, generate TV advertising worth Rs 6.5 billion a year, get sponsorship (both team and central) worth Rs 2.9 million a year, gate receipts on Rs 1.75 million a year as well as stadium advertising of Rs 800 million a year.
Impact in the M&E industry
The acquisition cost was then considered steep for domestic tournament. According to the KPMG report, SET has to pay $ 316 million (Rs 12.6 billion) in equal instalments over the initial five year and $ 608 million (Rs 24.3 billion) for the nest 5 years. That means SET had to pay about Rs 2.53 billion to BCCI in 2008. However, with the success and popularity of the tournament the investment seems to have paid off for the broadcaster. The league, screened every evening in a prime slot at 8 pm pulled in viewers in large volumes. As per TAM ratings, the final of IPL on 1 June 2008 fetched Max an average of 4.7 over 57 matches on SET Max, showing that audience interest was sustained throughout the long tournament, which was a concern at the beginning. These ratings were unprecedented for domestic cricket tournament.
The report further states, the huge viewership that the matches gained pushed up advertisement rates for 10-second spots to Rs 500,000-1 million, which was marketed at Rs 200,000 per 10 seconds at the start of the tournament. ESPN Star Sports had charged about Rs 750,000 -1 million for 10 second spots for the India-Pakistan T20 World Cup final in September 2007, which delivered a TRP of 15.9. Max reaped in the benefits of the leap in viewership which pushed it to the number 1 slot on channel viewership share bases during Q2 2008 during the broadcast of IPL.
The report also states that IPL provided a good opportunity to marketers. FMCG companies like ITC, Mother Dairy and Nestle, insurance companies, Pizza Hut and Cipla were the leading advertisers during the first edition. Many players like the suiting major S Kumar’s Nationwide who were the apparel sponsors of team Jaipur-entered at the later part of the tournament, after gauging its success and popularity. Franchisee owners also spend money on marketing and promoting their respective teams, and in turn generated revenue from team Sponsorships. Industry players are unanimous in their views that IPL has acted as a big driver for advertising spends this year.
Future prefect in the immediate run
Gauging by the industry reaction, IPL is expected to continue as a prime driver in the M&E industry for the coming year. Further, advertising rates for other cricket telecasts are also expected to increase since the IPL rates are also expected to be used as future reference points by the broadcasters. Many retail majors plan to tie-up with IPL franchisee, given the fact that the business format of IPL is modelled on the EPL, which has built its properties through retail tie-ups and merchandise. Industry players also plan to capitalise on celebrity brand ambassadors and merchandising. Celebrity endorsed branded T-shirts, sunglasses, wallets and travel bags are expected to be promoted in a big way, says the report.
In the long run
The report also gave some speculation on how the IPL could sustain in the long run. IPL’s ability to sustain and grow its popularity in the long term depends on the ability of individual franchisee to ‘break out’ and become large media properties on their own. Franchisees may have to increase their marketing and promotional spends to effectively monetise their fan base and build brands out of their respective teams.
Franchisees also need to think about how to maintain fan’s interest when there are no matches to watch. Even though the success of the domestic cricket league tournament has been unprecedented, rating show that it still trailed the T20 world cup final in terms of viewership. In the future too more teams sponsors, franchisees may try to increase the mix of premium seating in their home stadiums, and generate revenues from Food and Beverages.
Further, the report states that the league itself is set to expand with the addition of 4 new franchisees from 2009-10. This is likely to take the total number of teams to 12 and is expected to automatically increase the scale of the tournament. In turn, it is also likely to provide more opportunities for advertisers.
For the immediate future however, even as India waits for the next edition of IPL, pure business logic makes the tournament pretty compelling for the advertisers and media buyers in India, and in turn exciting prospects for the M&E industry.
