Star Sports' high rates for India-Australia series a strategy to prep market for IPL 2018?
A week before Star India bagged IPL media rights for a whopping Rs. 16,347.5 crore, it had hiked the rates for the upcoming India-Australia ODI series to Rs. 11.75 lakh for 10 seconds for T20 matches
Just a week before Star India bagged IPL media rights for a whopping Rs. 16,347.5 crore, it had hiked the ad rates for the upcoming India-Australia ODI series to Rs. 11.75 lakh for 10 seconds for T20 matches. According to industry sources it has come down to Rs. 7-8 lakh after negotiations. This move is now speculated to be the precursor for the IPL media rights auction to prep the industry for spiked ad rates during its matches.
In our previous report, we had mentioned that Star India has to essentially spend around Rs. 3,270 crore on the IPL every year (for five years.) At last count, Sony Pictures Networks had raked in ad revenue of Rs. 1,400 crore from the broadcast of IPL in India this year and Rs. 400-500 crore from subscription, as per industry sources. SPN achieved around 10 per cent increase in the ad rate. It is speculated that Hotstar earned around Rs. 150 crore of digital ad revenue from IPL edition 10. That makes the total revenue around Rs. 2,000 crore.
For the remaining Rs. 1,300 crore that Star India is falling short of, a rough back of the envelope calculation shows that Star India will need to increase ad revenue and subscription earnings by 30 per cent. Additionally, its broadcast rights for the Rest of the World should also bring in around Rs. 400-500 crore to come to the much-needed amount of Rs. 3,200–3,300 crore.
However, media planner Anita Nayyar, CEO, India & South Asia at Havas Media, doesn’t look at it (the jump in ad rates for India Australia matches) as a precursor to IPL since India-Australia packages came much in advance. “It is considered as one of the premium properties and its acquisition rate is also high,” she said.
But few industry sources pointed out that the network might leverage IPL to get the inventory sold for the series.
Dinesh Vyas, Associate VP (Planning), OMD, earlier pointed out that the channel had to cash in on the festive season which coincides with the India-Australia series and is critical for most brands, thanks to demonetisation.
