Cricket is the most watched sport in the country.Thousands watch every game in the stadium while millions watch it on TV.Considering the cable charges that we pay for watching TV, we almost watch every game for free.But the recent developments in the auction of satellite rights of IPL and India matches poses a serious challenge for the broadcasters to make profits.This blog is about the future of cricket match viewership.Will it still remain free in future?
Star India acquired the television rights for broadcasting IPL at a whopping 16,347.5 Crore for five years.Other than this star has also acquired the BCCI rights for 6138 Crore for a span of five years.Let me break it down for better understanding.First, let us consider IPL.
16,347 Crore ---->3300 Crore -----> 60 Crore------>1.5 Crore ------> 25 Lakhs
(5 years) (per year) (per match) (per over) (per ball)
i.e 50 days
Now, this is huge and historic.Nobody would have ever thought 10 years back that within such a short span of time this tournament will reach such great heights of popularity.
Similarly, the rights for all matches of India have been sold for 6138 Crore which expands to 102 matches over a span of five years which translates to 60.17 Crores per match.
One might think how a T-20 game in IPL is costly than a full match played by team India.But this is quite obvious because IPL involves more glamour, sponsorships, and viewership.It is a big event also for the Bollywood and corporate.Very few big banner films are released during IPL, fearing a loss in viewership and revenue.
The above price does not include the operational costs Star Sports will incur for showing every match.This includes infrastructural costs for broadcasting, commentators etc.
Advertisements are a major source of revenue.The fact is advertisement rates have not increased exponentially over past 3-4 years.But one thing that has penetrated amongst the audience is digital media.Star also owns Hotstar, hence surely it will try to recover a large chunk of its investments from Hostar.This is also because Hotstar is a subscription-based platform.This also means that the subscription rates on Hotstar are going to rise in future.
It is not that sports events are not given such high prices.English Premier League and NBA rights are sold at much higher price than the IPL rights.But these events are quite old, prestigious and also have much more penetration than cricket.Cricket is primarily watched in Subcontinent countries.Also, there is a concept of paper view which has not yet started in India.Hence to recover so much money in India looks difficult.
Star has been incurring a lot of losses in broadcasting matches played by India.Reports indicate that Star faces a loss of approximately 4 Crore for every match.Star also has the ICC rights.In the past broadcasters have also faced huge losses in these events.During the 2015 World Cup Star had to face huge losses because India did not reach the final of the tournament.One thing is for sure, a major chunk of money in world cricket is driven by India.
But since Star has been in this business for so long, it must have some plan ready.I only fear that watching cricket does not become too expensive for the Indian viewers.Because if this happens broadcasters might face big consequences at we would not take long to switch sports.Because people of India spend smartly and it is quite unlikely that they would spend so much money on entertainment (that too a sport) when many other options are available.I believe Sony has taken a wise decision by pulling out from the auction early.They are now focussing on International matches and on sports other than cricket.
Star India acquired the television rights for broadcasting IPL at a whopping 16,347.5 Crore for five years.Other than this star has also acquired the BCCI rights for 6138 Crore for a span of five years.Let me break it down for better understanding.First, let us consider IPL.
16,347 Crore ---->3300 Crore -----> 60 Crore------>1.5 Crore ------> 25 Lakhs
(5 years) (per year) (per match) (per over) (per ball)
i.e 50 days
Now, this is huge and historic.Nobody would have ever thought 10 years back that within such a short span of time this tournament will reach such great heights of popularity.
Similarly, the rights for all matches of India have been sold for 6138 Crore which expands to 102 matches over a span of five years which translates to 60.17 Crores per match.
One might think how a T-20 game in IPL is costly than a full match played by team India.But this is quite obvious because IPL involves more glamour, sponsorships, and viewership.It is a big event also for the Bollywood and corporate.Very few big banner films are released during IPL, fearing a loss in viewership and revenue.
The above price does not include the operational costs Star Sports will incur for showing every match.This includes infrastructural costs for broadcasting, commentators etc.
Advertisements are a major source of revenue.The fact is advertisement rates have not increased exponentially over past 3-4 years.But one thing that has penetrated amongst the audience is digital media.Star also owns Hotstar, hence surely it will try to recover a large chunk of its investments from Hostar.This is also because Hotstar is a subscription-based platform.This also means that the subscription rates on Hotstar are going to rise in future.
It is not that sports events are not given such high prices.English Premier League and NBA rights are sold at much higher price than the IPL rights.But these events are quite old, prestigious and also have much more penetration than cricket.Cricket is primarily watched in Subcontinent countries.Also, there is a concept of paper view which has not yet started in India.Hence to recover so much money in India looks difficult.
Star has been incurring a lot of losses in broadcasting matches played by India.Reports indicate that Star faces a loss of approximately 4 Crore for every match.Star also has the ICC rights.In the past broadcasters have also faced huge losses in these events.During the 2015 World Cup Star had to face huge losses because India did not reach the final of the tournament.One thing is for sure, a major chunk of money in world cricket is driven by India.
But since Star has been in this business for so long, it must have some plan ready.I only fear that watching cricket does not become too expensive for the Indian viewers.Because if this happens broadcasters might face big consequences at we would not take long to switch sports.Because people of India spend smartly and it is quite unlikely that they would spend so much money on entertainment (that too a sport) when many other options are available.I believe Sony has taken a wise decision by pulling out from the auction early.They are now focussing on International matches and on sports other than cricket.
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