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SBD Global/October 10, 2013/Marketing and Sponsorship

Indian Star TV Banking On Cricket For Growth, Eyes Tournament Sponsorship Rights

Star TV has spent more than $2.9B in buying cricket broadcasting rights, "which has made it the undisputed leader in the segment," according to Surajeet Das Gupta of the Indian BUSINESS STANDARD. Now, "it wants to go one step forward by grabbing sponsorship rights of cricket tournaments." The reason "is simple but elegant: it wants to position the Star brand in such a way that it becomes synonymous with cricket in India." It is the second time that Star "has decided to tread beyond broadcasting." Last year, it paid "a hefty" Rs 100 crore ($16M) for three years to become an associate sponsor of the popular Indian Premier League. Explaining the strategy behind the dalliance with title sponsorship, Star TV India COO Sanjay Gupta said, "We are betting big on sports, of which cricket is the most dominant content. There is a big potential to expand its share of total viewership. We want to identify Star closely with cricket." Star TV is the biggest cricket broadcaster in India -- "the hub of world cricket." Its nearest rival, Sony, has spent $1.6B to acquire broadcast rights, "but has only one property in its kitty: IPL till 2017." So "why is Star TV putting so much money into the game?" Many broadcasters "have burnt their fingers in cricket." The risks "come with immense potential for growth for those who have the cash to stay put." To begin with, "despite the criticism and fears," cricket constitutes over 10% of the annual TV advertising pie, currently estimated at around Rs 14,000 crore ($2.3B). Also, unlike general entertainment channels, which draw 60% of their revenues from advertising, subscription constitutes more than 60% of a sports channel's revenue. The key problem, according to Gupta, is that sports channels have only a 4% market share "of the total broadcasting viewership pie." One reason for the low viewership of sports programs is that "the commentary has so far been almost exclusively in English, which has limited appeal." Gupta: "We are now trying to break this by introducing commentary in Hindi which has huge reach in markets like Uttar Pradesh, Madhya Pradesh, Punjab and Haryana, and broadens the viewership reach" (BUSINESS STANDARD, 10/8).
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