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Tuesday, June 28, 2022

Star sensible, smartest bidder; digital bid by Viacom18 over-exuberant: Harish Thawani

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While Star India retained TV Rights in the Indian subcontinent for INR 23,575 crore, Viacom18 shelled out INR 23,758 crore to claim digital rights (packages B & C) for the same region. Viacome18 further won the Australia, South Africa, and United Kingdom rights while Times Internet bagged MENA (the Middle East and North America) & USA rights.

Former Nimbus CEO Harish Thawani spoke to Ajit Weekly News about what he thought of the media rights auction, the spending on TV and digital rights as well as the overseas market. Excerpts:-

Q: Star India retained the TV rights, but let go of the digital ones. How do you see this?

Thawani: Star has been the most sensible and the smartest bidder. They have the incumbent knowledge and knew that TV is where the money is. They retained the TV, drove the price for digital and then told Viacom18, ‘acha bhai, aap le jaao. Ab mehanga ho gaya zyada’ (Okay brother, you take it. The price has gone very high).

I think Star’s TV rights bid in the circumstances of such competitive bidding, is measured and calculated. I believe that if they execute their plans well, it will be at least break even and maybe somewhat profitable for them on the TV rights in India.

Q: The biggest talking point from the auction was digital rights for the Indian subcontinent going for a very high price and eventually taken by Viacom18. How do you assess this trend of going big on digital rights?

A: On Viacom18, who bid for digital, I think it is over-exuberant and definitely, they will struggle to reach break-even. In my view, they could end up picking up a significant loss on profit and loss. Maybe there is a strategic view on taking up with a long-term interest in mind. From a pure P&L point of view, they could lose as much as five to seven thousand crore.

They (Viacom18) have overbid like it’s an over-exuberant offer. It’s a miscalculation; it’s wrong and incorrect, they should not have extended it so much. Some experts I heard on TV and other places say it’s an egoistic and irrational bid. I can see why it’s getting reactions like that.

In my view, it’s a bid that does not make any sense. When people say digital has grown, no. The foolishness in digital bidding is dominating. Of course, digital has grown, nobody is denying it. But is digital bigger than TV in India? It’s nonsense. Any industry participant will tell you that is not correct.

Q: In overseas IPL rights, many companies like Sky Sports in the UK, and Fox Sports in Australia didn’t come up to claim the rights. Why do think they shied away from this?

A: Remember that Sky Sports in UK and Fox Sports in Australia are largely subscription-driven channels. In those markets, the IPL is not a driver of subscriptions because, in those markets, these channels are aimed at the local population. In England, football dominates, dominates and dominates. Cricket is not even number two.

Anyways, Sky Sports has English cricket, World Cup and Ashes rights. IPL makes no difference to them so much from a subscription point of view and occupies too much space. It’s occupying 74 matches for whatever days in a row, coming in at a time that runs into UK prime time.

On weekends, Sky Sports can’t afford that as they have English Premier League. So, there is a conflict in scheduling and adds little value to the subscription base. All foreign territories have been taken by the Indian broadcasters, which reflects the inadequate ability of the BCCI and its advisors to attract some companies from the overseas markets.

Q: Apart from Star and Viacom18, Times Internet has signed up as an overseas broadcaster for the MENA and US region. How do you see this development?

A: Times owns Willow TV region, which is now a large streaming service for cricket. It’s largely a streaming service, which makes sense for them. Now they have their own placement, the streaming platform of Willow TV, and also they own Cricbuzz, which is the number two cricket site amongst the Indian diaspora.

They will now use it for themselve’ and I can imagine that Willow TV’s footprint has grown in other parts of the world too. I don’t know if in MENA, they will keep everything for themselves or whether they will do a partnership with one of the platforms there, that remains to be seen. But their ownership of Willow TV puts them in a good position to utilise these rights. They will do well; they got it cheap.

Q: With IPL media rights going for a really high price, there could be an increase in more advertising space and ad slots rates. How do you see the working of IPL advertising revenue in the upcoming cycle?

A: Inventory remains the same. Of course, the ad rates will have to be pushed and that’s a consequence when ad rates get pushed in a growing economy every year. There will be a greater push as the rights have gone up. But not by much. I have spoken to several advertisers; they are not so worried. They are already paying 10 lakh for 10-second slots. 10 ka 11 ho jayega, de denge (10 lakh will become 11 lakh, they will give).

–Ajit Weekly News

nr/bsk

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