Too big a property: Viewership drop may not affect IPL media rights auction?

With the Indian Premier League (IPL) 2022 viewership reportedly seeing a drop in the first two weeks, the industry has started wondering if this will impact the upcoming media rights e-auction for the cash-rich league.

Media watchers say the viewership drop is not alarming since these are the initial days. They are hopeful that the viewership will pick up as the tournament progresses. Some experts say the below-par performance by some of the popular teams is one of the reasons for the drop in viewership.

RPG Group Chairman Harsh Goenka recently tweeted about five likely reasons why the viewership has dropped. "Why IPL TV ratings are down: the crowd favourites MI and CSK playing poor, heroes like Virat, Dhoni, Rohit haven’t fired yet, more matches causing fatigue, all matches in Mumbai region (fan engagement lower), and after 2 years of watching TV, people prefer to go out."

A section of media experts is optimistic that the lower viewership will not have much impact on the IPL media rights e-auction since there is no single property in India that can match IPL's scale and size. Another argument being advanced in IPL's favour is that the property cuts across language, age, and gender barriers.

"The drop in viewership is worrying but it will not have a significant impact on IPL media rights auction. The dynamics of e-auction are totally different. Each player has a different level of desperation and nobody would want to be without IPL for the next five years. It's too big a property to miss," says a senior executive from a leading TV broadcasting company.

An official from another TV broadcast network went on to say that the IPL would see a bidding war for both TV and digital rights, albeit with different intensity. "This edition of the IPL is happening after two years of the pandemic, which had forced people to stay at home. The IPL viewership drop could be due to the fact that normalcy has returned and people are no longer confined to their homes. That said, IPL is still the biggest property from both reach and impact perspectives. It will see a strong bidding war in the upcoming auctions," the official stated.

According to media reports, Disney Star, Sony Pictures Networks India, Zee Entertainment, Viacom18, Amazon Prime Video, Dream Sports-owned FanCode, and MX Player are some of the companies that have picked up the IPL tender. Considering the kind of monies that are involved, the unanimous view in the industry is that Disney Star, Sony, and Viacom18 backed by Reliance are the key contenders for TV and digital rights. Amazon is planning to mount a serious bid for digital rights, media networks say.

Triplecom Media iTap Founder & CEO Kunal Dasgupta also believes that the value of the IPL media rights will not see any dent due to a drop in viewership. He believes that the IPL digital rights will see a lot of interest since digital is where the viewership has shifted over the last few years.

"The big fight will happen for digital rights and not for TV rights. I don't think the TV rights value will be going much above the reserve price of Rs 18,000 crore. These stories of drop in viewership of IPL will not have any impact on the value that the property will garner from the upcoming auctions," he asserted.

Earlier this month, the BCCI released the tender for the e-auction of IPL media rights. The base price for the five-year IPL media rights from 2023 to 2027 is Rs 32890 crore. This is almost double of Rs 16347.5 crore that Star India had paid for the 2017-22 media rights cycle.

The IPL media rights tender has four packages - TV rights for the Indian sub-continent, Digital rights for the Indian sub-continent, Non-Exclusive Digital rights, and Rest of the World (ROW) TV and digital rights. The winner of Package B rights will also have the first right to refusal over the Package C rights.

The BCCI has set a base price of Rs 18130 crore for TV rights, Rs 12120 crore for digital rights, Rs 1440 crore for Non-Exclusive digital rights, and Rs 1110 crore for ROW TV and digital rights.