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Business – IPL on YouTube may eat into Sony’s ad pie

Meenakshi Verma Ambwani & Ratna Bhushan

NEW DELHI: The Board of Control for Cricket in India’s (BCCI) move to stream IPL matches live on YouTube could dent the marketing clout of official
television broadcaster Sony Entertainment in the future, although internet penetration in the country may take years to achieve critical mass. BCCI has inked a two-year deal with the Google firm, and advertisers ET spoke to said from next year, they will split their IPL budgets between TV and the net.

Sony Entertainment, rechristened Multi Screen Media (MSM), had paid a record Rs 8,200 crore for a nine-year exclusive television rights deal for IPL. The firm is learnt to have earned over Rs 600 crore through deals with advertisers for the upcoming third season of IPL-over 30% premium over last year. “It’s a futuristic and brilliant move to take the tournament global. The numbers in India are small as of now, but no advertiser can afford to ignore out-of-home audiences with free access to IPL,” said Navin Khemka, senior VP of media buying firm Zenith Optimedia. He also felt that live streaming will open up a major opportunity to calculate viewership and formulate strategy accordingly.

LG India, a major advertiser during IPL broadcasts, said it was not overly concerned about the BCCI move. “Some consumers will be weaned away from Sony. And as an advertiser, we will be closely watching the response on YouTube and will take a call on future spends on IPL,” said its CMO LK Gupta.

Advertisers like Havells believe that the online medium is not unfamiliar territory. Vijay Narayanan,VP, marketing, pointed out that many brands are already present on social networking sites. “They are spending probably less than 1% of their advertising spends online, but the numbers are set to grow,” he said.

Meanwhile, MSM India maintains that it does not consider the deal to be a threat to its revenues or viewership. Its president Rohit Gupta said in a country like India, with over 110 million cable and satellite viewers, different technologies can co-exist. “We are not like the mature markets in US and UK, where one technology will start eating into the revenues earned by another technologies — something like that would not happen in the next 10 years. The experience on watching cricket on television at prime time with family is different from watching it on the Internet. We believe the online streaming of matches will only help us get more viewers on television,” he told ET.

Online advertising, one of the most cost effective mediums, has been a fast growing segment in the country. Even political parties had used the medium extensively to reach out to younger audiences through various campaigns in the general elections last year. In the UK, Internet spends surpassed TV spends last year.

Under the terms of the BCCL agreement, Google will have exclusive online rights for IPL content for two years and both Google and IPL will jointly share revenues from sponsorships and advertising on both YouTube and IPL’s official website. Advertisers said that the internet major has not yet approached them since the announcement was made
on Wednesday.

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January 22, 2010 - Posted by | Uncategorized |

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