Like most of the media industry, 2010 was a significant year for sports and sports broadcasting. Jury is still out on whether things got better or far worse, but clearly there are trends and issues which continue to emerge which the industry will have to deal with going forward.
Given the continuing increase in high impact live sporting events being broadcast, the sports channel shares moved up to 6 per cent of total viewing in the industry. In March and April, driven by the show case event of the year - the IPL - the business share went upwards of 10 per cent.
World Cup Football, which was the summer event, did not deliver cricketsque ratings despite the hype. Live cricket continued to drive the viewership numbers of the business.
After the slump of 2008, and marginal improvement in 2009, 2010 definitely delivered a marked improvement in advertising revenues. The rates improved and settled back to superior levels, and in some T20 matches commanded very high premiums.
The industry is estimated to end the year at close to Rs 16 billion, which is a 25 per cent growth over last year. Cricket continues to be 80 per cent of the ad revenue by share, and over 70 brands committed to the category consistently this year.
While numbers in other sports continued to be relatively small, the growth rates there are higher and sponsorship interest is more evident. Soccer continues to be the second largest sport in terms of advertiser interest. World Cup Hockey, which was marketed aggressively, indicated that hockey could generate revenues and viewer interest again if the Indian team started doing well.
If one looked at various viewership trends emerging within the industry, it appears that ODIs and Tests are holding their ratings, while T20s continue to drive viewership growth. IPL numbers continue to demonstrate the fact that the there is a clear shift from GEC to this category in those months - especially when the more popular and successful teams play.
However, T20 performance in Champions League also indicates that team affiliation as well as team performance is driving viewership, which clearly comes through in Indian Cricket team ratings across various events. This year also demonstrated through the Hockey World Cup that this product can be built strongly, and viewers will come back; as is soccer which through EPL, UEFA Champions League and other European leagues, is building a fair degree of traction in viewership across the board.
Golf is another fast growing sport which now boasts of a critical mass of dedicated viewers, as is Motor Sports which have their enthusiastic fan base. Indian football continued to trundle along, and while the ratings are comparable to EPL, does not garner advertiser support. Also, the support for this category is very geography specific and does not lead to advertising efficiencies.
Tennis gets a lot of airtime because of ATP events but the real penetration comes only in the Grand Slams. US specific leagues, while delivering high quality sporting action, suffer because of poor telecast times, but still have enough following to demand time slots.
Fighting sports continued to stay strong, and rather surprisingly demonstrated good growth in the hinterland. CWG and Asiad, in spite of their tremendous build ups, languished in terms of ratings, and continued to confound the sports channels and analysts.
The other big shift which came through this year was the impact of DTH revenues on the affiliate model. This is an addressable opportunity, and is already demonstrating that it could overtake analogue cable revenues, perhaps as early as 2012. Already, with most sports broadcasting businesses‘, revenues from DTH being in the range of 40-45 per cent of total affiliate revenues, they are demonstrating very high double digit ( and in the case of some operators - triple digit ) growth rates.
Also, this platform is expanding the scope of its services by providing differentiated viewership such as pay-per-view options, High Definition and 3D. This platform could be a game changer for the sports broadcasting business and start delivering subscription revenues of the kind which the industry deserves and has been counting on for its survival.
Cable analogue continues to perplex, and is not able to deliver any significant growth to the sports channels. While digital services on the ground are expanding, the service delivery and the service orientation still lags behind what is required by this industry.
From an overall perspective, though, affiliate revenues continued to be the big dampener this year. Worldwide, sports broadcasting industry is driven by subscription revenues, and the same model has to now transcend into India. Sports is premium and specific content, supported by viewers who are driven by loyalty to franchises and teams; they will pay top dollar for this quality content. Our underdeclared affiliate system and the pricing regime continues to put the revenue model of the industry under grave threat.
Cricket, which drives the revenue side of the sport, continues to be a financial challenge for all broadcasters. The exorbitantly priced Champions League aside, the rights fees of other cricket events and national board‘s rights continue to hurt the industry as the revenue model in our country (especially affiliate) is not supporting this business.
The 2009 Nimbus deal with BCCI was an indicator of things to come, and the next round of rights biddings will demonstrate the appetite which various broadcasters will have around these properties. In my opinion, these exorbitant prices, unless they reach a win-win ‘Broadcaster-Board‘ equilibrium, will by itself drive more franchise cricket; various national boards will use this opportunity with broadcaster support to build their own leagues consisting of international players. This space will be an interesting one to watch as it will put competing variables at play which the ICC and the member boards will have to grapple with. This is probably the most significant content issue in the industry and will be interesting to watch how it unfolds.
Speaking of Franchises, I think that it is the way most of the sport will move in our country. With the exception of IPL, the other sports viewing in India is mostly around the national teams, and there are just not enough broadcast opportunities to drive viewer commitment and interest.
Also, the overwhelming financial impact of one product will necessitate movement in this direction. I forecast 2011 as the year when we may see two to three big ticket launches of alternate sports franchise driven platforms in India. In the long term, this will be a game changer for the business and will drive our sporting landscape towards a US-based multi-sport franchise system.
The story is not written completely yet, but 2010 demonstrated that the winds of change have started blowing in the business. The actions of local federations, broadcasters and International Governing Bodies in 2011 will determine the way our industry will move forward. Expect big structural changes beginning to happen for the good for the sport and the viewers. The road to that destination is long and winding but the view en route should be exciting.
So sit back and enjoy and watch the action!
