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IPL viewership falls, advertising rates for cricket may take a hit

IPL viewership falls, advertising rates for cricket may take a hit

Mumbai/New Delhi : Some are blaming it on fatigue, others on the format, and still others on the shuffling of players across teams, but whatever the reason, television ratings for the fourth edition of the Indian Premier League (IPL-4) have fallen sharply.

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According to data from TAM Sports, a unit of TAM Media Research Pvt. Ltd, the average rating for the first 37 matches of IPL’s first three seasons was 4.81, and this has dropped to 3.26 in IPL-4.

A report by brokerage IIFL Institutional Equities said that while IPL-4 would end up being profitable for broadcaster SET Max, a part of Multi Screen Media Pvt. Ltd (MSM), its ratings have fallen on account of too much cricket—IPL-4 started shortly after the end of the cricket World Cup—and wholesale changes in teams that has diluted audience loyalty. The report also points to a lack of advertising by consumer products firms on SET Max’s coverage; advertising by such firms typically constitutes half of all television advertising.

A Dabur India Ltd spokesperson said the company has never advertised on IPL because of the clutter and high ad rates. He said general entertainment channels (GECs) are a better fit for consumer brands in Dabur’s portfolio because they address a huge female population. Hindustan Unilever Ltd (HUL) did not buy spots on IPL matches this year, according to an earlier Mint report. When contacted on Friday, an HUL spokesperson declined to comment on the matter.

However, Nestlé India Ltd has included IPL in its media plan. “Nestlé continues to advertise Kit Kat, Nescafe and Maggi on IPL. Though the GEC audience fit better, we have been including IPL to supplement our reach to a primarily sports-loving audience in a buzzy environment," said a Nestlé India spokesperson.

Rohit Gupta, president of MSM, does not agree with IIFL’s contention that fast-moving consumer goods brands do not advertise with the channel. “Brands such as Heinz, Godrej, Cadbury have always advertised with us. I don’t know if the people who frame such research reports know their business," he said.

According to the IIFL report, SET Max will earn ad revenue in excess of 900 crore from IPL-4. Akash Chattopadhyay, an analyst with IIFL, said that while valuations have been oversized for some of the new teams, the series has seen a 20% drop in ratings. “We are of the opinion that ratings may pick up during the last knockout match—to the tune of 8 TVR (television ratings points). But overall, the series would be nowhere close to the first edition." MSM’s Gupta said MAX’s revenue from IPL would exceed 1,000 crore.

To be sure, one of the television sponsors of IPL-4, LG Electronics India Pvt. Ltd, said it would push for better rates next year. “This year, IPL has been disappointing for us, and we will pick up the matter with SET Max to negotiate deals for next year’s tournament," said L.K. Gupta, chief marketing officer at LG Electronics India. He added that while his firm considers IPL one of the best “platforms" to launch new products, viewership “has declined 20%". LG has spent 30 crore on its television sponsorship of IPL.

Mona Jain, chief operating officer (COO) of VivaKi Exchange, the media buying agency for Publicis Groupe SA, is also concerned about the poor showing of IPL-4. “Brands have tied up with IPL at a premium. Obviously its low performance is an issue," she said.

Things will improve, said R. Gowthaman, leader at Mindshare, a part of GroupM India Pvt. Ltd. “Yes, viewership has declined, and that’s because of the long format (10 teams) and swap of players in various franchises. But viewership could pick up as the series progresses," he said, and added that even in previous editions of IPL, there were marginal dips in viewership midway through the series.

An executive at an auto firm that is advertising on SET Max said that while overall ratings may have fallen, ratings in the higher income groups were still much higher than for a soap. The executive asked not to be identified.

MSM’s Gupta said overall reach numbers for IPL-4 are already at a high. “One hundred and forty-three million people watched IPL last year, and this year we have already crossed 146.5 million people," he said. Gupta insisted that the broadcast of IPL matches offered a more effective reach for advertisers, which is why “an advertiser pays 70,000 for 10 seconds on a prime-time soap on a general entertainment channel" but “ 6 lakh for a 10-second spot during IPL".

IIFL’s Chattopadhyay said that apart from SET Max, the Board of Control for Cricket in India, which owns IPL, will also make around 1,000 crore from the league.

Some experts are concerned that the falling ratings for IPL broadcasts signal a fatigue with cricket that won’t bode well for broadcasters who have more cricket lined up: Ten Sports, which will telecast the India-West Indies series; ESPN, which will cover India’s tours of England and Australia; and Neo Sports, which will telecast Australia, West Indies, and England’s tours of India. Previous estimates had suggested that these series would generate around 2,000 crore of ad revenue for broadcasters. “There’s too much of cricket happening, and the fatigue is showing in the ratings," said Anita Bose, general manager in charge of the LG account at GroupM India. She said series scheduled in the coming months could bear the brunt in terms of lower ratings and advertising. “Series scheduled in the November-December period will be better off because it is the festive season," she said. “June-July , I am not too sure."

The India-West Indies series falls squarely in that category, but Joy Chakraborthy, chief revenue officer and COO (niche channels) at Zee Entertainment Enterprises Ltd, said it wouldn’t be hit by the trend evident in IPL-4. “Serious cricket will always be sold. The trouble with IPL is that nobody knows which player is playing what team any more," he said.

Chakraborthy said he’s already begun the process of selling advertising for the series and has seen no shortfall in demand. “As we speak, we have already closed in three big sponsors, which will be announced in the coming days. Ad inventory is going at 2 lakh-plus for 10 seconds. For our long-term advertisers, we are offering inventory at 1.75 lakh for 10 seconds," he said. Zee owns Ten Sports in India.


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