May 27, 2012 2:36:23 am
IPL 2012 had cricket and controversies playing together,on the same pitch. First,two IPL players were caught on camera agreeing to spot-fix a few matches,then Kolkata Knight Riders owner Shah Rukh Khan threw a fit and some abuses at Mumbais Wankhede stadium,followed by molestation charges against Royal Challengers Bangalore player Luke Pomersbach. But something went unnoticed in the chaos of IPL-5: it was the year when the brand grew bigger and stronger,selling close to two million tickets for Rs 200 crore.
Between its debut in 2008 and its fifth edition in 2012,the Indian Premier League (IPL) and its franchisees have built a market of half-a-billion dollars on sponsorships alone,a performance thats remarkable,especially since it comes in a period marked with economic strife.
If the sense of fulfillment could be calculated,it would run into several billions of dollarsfar exceeding those earned by the organisers and franchisees in the past four yearsat the end of the fifth season, says N Srinivasan,President,Board of Control for Cricket in India.
His is not the only voice heralding the IPLs coming of age. In fact,the chorus began building when Rajasthan Royals Ajinkya Rahane scored an impressive 98 in the first week of the game and listless fans got up and took note. Indeed,they werent left wanting for cracking action on the ground after that.
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Business associates,on whose shoulders rests the burden of the survival of the game,are part of the cheering choir,alongside fans. IPL has established itself as the single biggest bonanza for viewers as well as advertisers on television this year, says Divya Gupta,CEO,Dentsu Media,the agency that manages ad spends of advertisers such as DLF,Toyota,Canon,Unicharm and Panasonic. Arguing that advertisers initially stayed away from IPL because of the poor performance of the Indian team on earlier international tours,Sudha Natrajan,CEO,Lintas Initiative Media,says the apprehension soon wore off.
IPL-5 has been a late bloomer. A few of our clients decided to stay away from the event initially but several moved in as the tournament progressed, says Natrajan,whose agency is one of the leading media buyers managing ad spends of marketers such as MRF,Voltas,Maruti,Bharat Petroleum,ITC,Sony India,LIC and Bombay Dyeing,among several others.
Gupta and Natrajan represent those whose initial apathy towards IPL led a section of observers to write off the fifth season as a nonstarter. Clearly,the script changed along the way. Apart from the advertisers,the team owners are also on a high this year. Mohit Burman,co-owner of Kings XI Punjab,says IPL-5 has been a game-changer commercially. We will certainly turn profitable this year, he says. Burman credits the turnaround to a renewed enthusiasm from sponsors (such as Videocon d2h,ACC Ltd,McDowells No. 1,Kingfisher,Coca Cola,Max Healthcare,among several others) besides an unprecedented surge in ticket sales.
On the ground
Brimming stadiums have been the biggest boost for IPL this year. The packed stadiums this year should silence all doubting Thomases, says Srinivasan. According to estimates gathered from franchisees and their associates,close to two million tickets were sold this year,translating into a windfall of around Rs 200 crore.
The rush was unprecedented. We havent seen this kind of response for any event,not even for the previous IPL matches, says Ashish Hemrajani,founder and CEO,bookmyshow.com,an online ticket booking platform. Bookmyshow.com was the ticketing partner for Mumbai,Delhi,Punjab,Rajasthan and Pune. It also sold tickets for the opening,the play-off and the final matches. More than 90 per cent of the matches were sold to capacity this time, he says.
According to Hemrajani,ticket sales through his platform were 35 per cent higher for Mumbai,30 per cent for Delhi,100 per cent higher for Rajasthan and almost four times more than that of last year for Pune (last year,the team didnt have its own stadium). Punjab saw the highest-ever ticket sales this year across its stadiums in Mohali and Dharamshala, he says.
Chennai Super Kings CEO Rakesh Singh says though they were not allowed to sell close to 12,000 seats this year as the Tamil Nadu municipal authorities had sealed three stands in the MA Chidambaram stadium in Chennai,yet their income from ticket sales has been the highest so far. We didnt give discounts this year, he says.
The price of tickets,in fact,ranged from Rs 200 to Rs 25,000. Franchisees such as Delhi,Mumbai and Kolkata,which found a large number of takers for premium tickets,are learnt to have grossed maximum sales of around Rs 30-35 crore each.
The organisers argue it wasnt merely the game on display that drew the crowds. It was the outcome of a well-thought-out strategy. Besides differential pricing to pull in fans across income groups,the organisers also spent money on big marketing campaigns around ticketing this year, says Raghu Iyer,CEO,Rajasthan Royals. IPL itself ran a campaign projecting the event as a sports-cum-entertainment-cum-outing opportunity for the entire family and all this helped. More than the income,the surge in ticket sales establishes the pull of the event and that,to us,is a bigger achievement, says Sundar Raman,CEO,IPL.
In the air
Broadcast rights are the single largest source of revenue for IPL (see box). It is not surprising,therefore,that the IPL fraternity was thrown in a tizzy when reports of falling viewership and advertisers deserting the platform started pouring in. A closer look at the viewership figures,however,reveals that it was a misguided scare.
Television rating points have a limited utility in measuring the popularity of an event. In case of IPL,the reach of the game,the buzz it generates,need to be taken into account while calculating its efficacy. And on those counts,it still remains the largest and most powerful event on television, says Dentsus Gupta.
Data sourced from the industry show that ever since IPL took off,MAX,the events channel of broadcaster Multi Screen Media Pvt Ltd (MSMPL) that owns the rights to IPL,has had almost 50 per cent share of TV viewership,and has been way ahead of the market leader in the Hindi general entertainment space, Star Plus. This year,close to 160 million people watched IPL on TV. If we leave Satyamev Jayate aside because it is simulcast across many channels,no programme on cable and satellite TV can match that kind of reach, says Natrajan.
The initial negative sentiment and the refusal to cut the ad rate from a steep Rs 4.5-5 lakh per 10 seconds pulled down MAXs ad income by around Rs 50-80 crore from last year to around Rs 700-750 crore this year.
Indeed,our earnings will be lower this year but we will still be profitable, says Rohit Gupta,president,Network ad sales,MSMPL. Gupta maintains IPL has been profitable for the channel since the second year itself. Media buyers maintain the event would have earned the channel more than Rs 2,500 crore in the five years on an outgo of less than 2,000 crore. With digitisation kicking in,we are expecting our subscription revenues to soar and that should make our balance-sheet healthier.
Besides TV,IPL was streamed live on the internet and mobile phones by Times Internet Ltd and Apalya Technologies,respectively,and both rights-holders say the response was more than exciting. So far,we have got more than 100 million views this year against 72 million last year, says Rishi Khiani,CEO,TIL. Apalya claims to have caught 11 million subscribers for 65 matches alone and CEO Vamshi Krishna Reddy claims viewers spent 17 to 20 minutes every day watching the matches on their mobiles.
Not wanting to miss the action completely,a lot of marketers who could not afford to buy advertising on MAX bought sponsorships from franchisees. This year,almost all franchisees are likely to earn anywhere between Rs 35-50 crore from sponsorships against last years Rs 15-Rs 25 crore, says a senior executive of a leading team. Even the Pune teams jerseys are choc-a-bloc with sponsors logos though they entered the market late, he says.
Even as the league matures and stabilises commercially,controversies have become a constant factor in its evolution. Interestingly,the organisers,even the advertisers and sponsors,seem unfazed by them. IPL is not simply a sport where reputations matter. It is a sports-cum-entertainment event. Like in the case of films,controversies have only helped in building the buzz around it and strengthened its recall among audiences, says the chief marketing officer of a leading advertiser on IPL not wanting to be named. Going by this,BCCI may have a lot to thank to the Enforcement Directorate,the Income Tax authorities and even the Sports Minister.
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