IPL 2020: Format changes impact Disney-Star India’s ad sales

The Indian Premier League (IPL) is more a carnival than cricket. Disney-Star India began 2020 with an ambitious revenue target of Rs 3,000 crore for the biggest sports tournament in the country. When marketers plan budgets for the year, they anticipate two peaks in ad spends. One is the months of April-May-June when the IPL usually takes place and the other is October-November-December, which coincides with the festive season.

Also read: IPL 2020 to go ahead minus Vivo as title sponsor

This year, COVID-19 has forced the Board of Control for Cricket in India (BCCI) to make format changes in the tournament, whose reverberations have been deeply felt by its broadcast partner Star India. So, what’s different about IPL 13 from an advertiser perspective?

“Disney-Star India used to sell their sponsorship packages months in advance. They usually have 11-12 Associate Sponsors and four Co-Presenting Sponsors. We are now in August, with less than a month for the tournament to begin, and in terms of inventory, out of 11-12 Associate Sponsorships, they have sold out six. Only Amazon has confirmed as Co-Presenting Sponsor. They are under tremendous pressure,” remarks Deepak Sharma, MD, Starcom India.

Adding further, he said, “A month ago, Star India stated that they will hike the ad rates by 15-20% because they believed viewership will see a boost as people are in their homes. However, if you haven’t closed on sponsorships, then you can’t command rates for spot buy. If I have sold 80% of inventory, then for the balance 20% I can hike the rates to Rs 12 lakh per 10 seconds.”

The broadcast partner for IPL has faced many more challenges in the past weeks. Title sponsor Vivo suspended its association with the tournament because of the negative China sentiment in India. The auto sector, one of the biggest category spenders on cricket, has become cautious with their ad spends. Only FMCG/ CPG, edu-tech, food-tech, gaming, consumer durables and electronics categories are expected to see a bumper festive season.

According to Anand Bhadkamkar, CEO – India, Dentsu Aegis Network, “For BCCI, getting a new sponsor will be at a completely different rate and understanding. There would be uncertainty for the new sponsor as this is a new format of the IPL which is happening under uncertain circumstances in the current year. It is yet to be seen how this deal will pan out, but cricket and especially IPL is always an attractive property and you always get a lot of interest. However, it won’t be the same consideration set if you are looking at a 3-4-year association.”

Only brands looking for a quick turnaround and bump in visibility would be advised to associate with IPL for a year. Media reports indicate that edu-tech player Unacademy, Ayurveda brand Patanjali and Tata have shown interest in becoming the title sponsor for IPL 2020. Edu-tech players seem the best fit as they have seen a tremendous growth surge during the Lockdown.

“Undoubtedly, IPL will get 15-20% more viewership because most of the people are working from home. Given the chance, people should watch a greater number of minutes compared to what they watched last year. The number of minutes per match will go up considerably this time. People don’t have too many choices of entertainment at this point in time,” opines Sharma.

This year, anticipating that most viewers will watch on TV, Disney-Star India has decided to put the cricket tournament behind a paywall on their OTT service Disney+ Hotstar. They have also decided not to renew their partnership with Jio Platforms that exposed the tournament to a potential 400 million users. Now, users can only watch 5 minutes of live feed for free before they are asked to become subscribers. This has implications for advertisers.

“Distribution will be the key factor that will impact the viewership,” observes Vishal Chinchankar, Chief Digital Officer, Madison Media. “Till last year, Jio subscribers added a big chunk of viewers. With Jio, the viewership should be intact, however without Jio, Disney+ Hotstar will have to ramp up their subscribers and daily five min free feed to all users.”

Starcom’s Sharma concurs, saying, “Last year, there were 400 million potential viewers, but this year their current base of paid subscribers is not more than 10 million. I personally believe that this 10 million subscriber base can go up to 30-40 million at best. They will be extremely low on reach.”

Adding further, he says, “Last year, because they had scale, they were operating at roughly 120 CPM, but this year since their reach has come down drastically from 400 million to 40 million, they have raised it to 180 CPM. Last year, they would have done roughly Rs 400 crore of advertising on Hotstar. This time it may not even cross Rs 200 crore.”

The 13^th edition of the IPL may also be plagued with scheduling conflicts.

Chinchankar observes, “Given the times we are going through, I would ideally expect the TV viewership to build large numbers over Disney+ Hotstar. However, let’s not forget that family viewing impact properties on TV like ‘Bigg Boss’ and ‘KBC’ will be coinciding during the same time. Hence, it will be interesting to see if these impact properties will eat into IPL viewership on TV or will it help Hotstar viewership.”

Sharma adds here, “In April-May-June brands spent on IPL and during the festive season genres like music, news and GE used to gain traction. Now, since both are colliding with one another, one will prosper at the expense of the other. Almost none of the advertisers have money to spend both on IPL and non-IPL properties this year.”

According to DAN’s Bhadkamkar, even the ‘carnival’ aspect will be missing from the tournament this year. “Due to COVID-19 there are many external factors such as (a) IPL is being hosted out of India, and (b) The stadium audience will not be there, so the viewer experience will completely change. If you saw the England vs West Indies test matches, the cricket was good but you don’t get that feeling of excitement without the crowd present in the stadium.”

Most experts agree that it would be a stretch for Disney-Star India to meet their pre-COVID revenue targets for 2020. Bets are that the broadcaster would do well to meet last year’s earnings and revenues are not expected to exceed Rs 2,000 crore.