Star India's Rs 16,000 crore IPL bid has interesting lessons for India's gaining digital market

Star India won even the digital rights for IPL despite Facebook bidding much more for it.

Star India's Rs 16,000 crore IPL bid has interesting lessons for India's gaining digital market
The IPL Media Rights tender process after the technical evaluation. Photo: IPL Twitter acoount
By ZeeBiz WebTeam
Updated: Mon, Sep 04, 2017
04:49 pm
Mumbai, ZeeBiz WebDesk
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Key highlights:

  • Star India won the media rights for IPL for a period of five years for Rs 16,347.5 crore
  • The highest territorial combined bid was Rs 15,819.54 crore
  • Facebook bid the highest for the digital rights of IPL with a bid of Rs 3,900 crore

Star India won the media rights to the most coveted properties in the country -- the Indian Premier League (IPL) for a period of five years for Rs 16,347.5 crore ($2.55 billion). 

It beat Sony Pictures Networks, which held the IPL rights till 2017 for the last 10 years (since IPL's inception), which had made a bid Rs 11,134.50 crore, according to data released by the the Board of Control for Cricket in India (BCCI).

While Sony made the highest bid for the TV rights for the Indian subcontinent with an amount of Rs 11,050 crore, in comparison, Star India's overall bid for the TV, digital and the global rights outweighed Sony's bid.

This is a huge jump in the bid amount for IPL rights, as Sony had earlier bought the rights in 2008 in a 10-year deal for just Rs 8,200 crore. This new deal is for nearly double the amount and for half the period.

This means that BCCI can earn several times more in the next five year post 2022.

IPL is one of the biggest advertising properties in India on television, and more recently on digital.

In IPL season 10, Sony raked in Rs 1,300 crore from advertising revenues through its television rights, according to a Financial Express report. A season earlier (IPL 9), it raked in ad revenues of Rs 1,200 crore, as per an Economic Times report. In IPL 8 it clocked in advertising revenues of Rs 1,000 crore.

Star India had won the global digital rights to IPL in 2015 for Rs 302.2 crore for a period of 3 years and beat Times Internet and Sony (Multi Screen Media).

Star India too had also benefited from the windfall from IPL as it had the digital rights over the last three years. The company was estimated to earned Rs 200 crore advertising revenue from IPL 10 on Hotstar and its digital streaming properties, due to huge growth in viewership on digital, according to a Live Mint report.

What is more interesting is that in IPL 10, for the first time, viewership on Hotstar surpassed the viewership on television in the first two weeks. Hotstar clocked in a viewership of 36.4 million as compared with 34.9 million viewership on television, according to a TOI report.

Digital rights for IPL received the maximum competition with five bidders. including Facebook, Airtel, Reliance Jio and Times Internet bidding.

While Facebook bid the highest for the digital rights of IPL with a bid of Rs 3,900 crore, but it was not enough to win the rights.

In fact, Star India's bid for the digital rights was the lowest at Rs 1,443 crore. In comparison, Airtel bid Rs 3,280 crore, followed by Reliance Jio's bid of Rs 3,075.72 crore and Times Internet's bid of Rs 1,787.50 crore.

However, while Facebook and the others failed to get rights ,BCCI awarded the media rights television and digital to the highest consolidated bidder. A reason why Star India won the digital rights.

Despite this, Facebook's bid is significant as it outlines the internet giants strategy in the Indian market. 

The company has been looking to become a go-to platform for live streaming of sports around the world.

It currently streams UEFA Champions League games on Facebook Live in the US, it has signed separate deals to stream Major League Soccer matches in the US, MLB games and World Surf League events.

Winning the IPL digital rights would have catapulted Facebook as a live streaming destination and would be even mean a huge hike in its advertising rates in India. This could further see its growth and dominance in the country.

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