Star India won’t make profit from IPL in first year owing to investments

By: | Published: January 18, 2018 4:44 AM

“In the next five years, IPL on Star would be an extremely profitable property, but not in the first year that is 2018. This year, we have made several investments in areas such as content, technology, besides launching six feeds, etc.

Star India, IPL, IPL 2018, Indian Premiere LeagueStar India won’t make profit from IPL in first year owing to investments (BCCI)

Star India, which bagged the telecast right of the Indian Premier League (IPL) in September last year, would not be able to make profits from the T20 league in its first year i.e. FY18 (Star follows the July-June financial year). “In the next five years, IPL on Star would be an extremely profitable property, but not in the first year that is 2018. This year, we have made several investments in areas such as content, technology, besides launching six feeds, etc. All this would help increase viewership that would automatically help in generating ad revenues,” Sanjay Gupta, MD of Star India, said on Wednesday while announcing the company’s content plan for the 11th edition of IPL. In September 2016, Star India had won television, digital and Indian and global media rights of the IPL for the next five years for Rs 16,347.50 crore. The broadcaster has introduced six feeds – including those in Hindi, English, Tamil, Telugu and Bengali – besides high-definition (HD). Star India claims that via the six channels along with Hotstar, the IPL will reach 700 million viewers this year. In 2017, 535 million viewers had watched the IPL. According to media analysts, Star India is estimated to earn total advertising revenue of about Rs 1,500 crore – including ad revenue earned from Hotstar – in the first year of telecast of IPL. Rival Sony India in 2017 had earned about Rs 1,300 crore in advertisement revenue. “IPL on Star is being sold as a premium property, which is a very different strategy when compared with the kind of strategy followed by Sony India. The aim is to maximise revenues and with Star bundling and selling advertising inventory, it should be able to achieve the Rs 1,500-crore mark as far as ad revenue is concerned,” said Harsha Joshi, former EVP, group trading, Dentsu Aegis Network.

As per industry sources, Star India is selling the slot of the co-presenting sponsor at Rs 150 crore. This includes advertising spot across all feeds, besides Hotstar as well pre-match and post-match programmes. Associate sponsorship is being sold at Rs 75 crore. The broadcaster is also selling bundled advertising inventory at around `90 crore. This includes access to ad spot across all six channels apart from Hotstar. “Different combinations of advertising inventory would be sold to advertisers. For example, advertisers can spend from Rs 5 crore to Rs 10 crore and even more depending on their marketing spends. In fact, local advertisers would also be able to buy ad spot this year, as we plan to sell the inventory of regional channels separately,” Gupta said. As for international viewers, the company which launched its video over-the-top (OTT) platform Hotstar in the US and Canada in September last year, plans to telecast the tourney on the same, instead of airing it on any other TV channel. “Viewers in the US and Canada would have to subscribe to Hotstar to be able to watch matches live. As for other countries, we are still in the process of negotiations with both TV networks and international streaming platforms,” Gupta explained.

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