India’s exit from T20 World Cup may spell bad news for Star’s ad revenue

Illustration by Suneesh K.

India ended its T20 World Cup campaign on November 8 with a win against Namibia, but the team led by Virat Kohli failed to reach the semi-finals.

Experts said India’s departure from the tournament is likely to spell bad news for Star India, the official broadcaster, in terms of advertising revenue.

“There are some (ad) slots for which they (broadcaster) charge a hefty premium and those are a big contributor to the overall ad revenue,” said Karan Taurani, senior vice-president at Elara Capital. “So, if you are expecting Rs 700 to 1,000 crore revenue generation from advertising, then it will be towards the lower end because of this factor (India out of the T20 World Cup).”

Nitin Menon, cofounder of NV Capital, a credit fund for the media and entertainment sector, said there will be a dip in the expected revenue upside because of India’s absence.

“If India would have continued in the World Cup right till the final, it would have been an entirely different ball game, with spot ad rates going over the roof,” Menon said.

Sadhvi Dhawan, Group Media Director at Blink Digitala digital ad agency, noted that the broadcaster would have had the chance of introducing some last minute premium inventory owing to increased enthusiasm (if India had reached semi-finals) which now they wouldn't plan to.

Star India, which has sold 90-95 percent of its ad inventory for the T20 World Cup, charged Rs 14-15 lakh for a 10-second slot on TV.

While the remaining inventory is limited, Sandeep Goyal, MD of ad agency Rediffusion, said that “if India had remained in the T20 World Cup, Star could have asked for anything and got it too.”

Star India is estimated to have hiked ad rates for the India-Pakistan match on October 24 to as much as Rs 18 lakh for a 10-second spot on TV.

“The early exit has been a major dampener for advertisers. There was a lot of hope and optimism, which pushed up expectations on spot pricing.

Viewership will really suffer. So advertisers are bound to crib,” said Goyal.

Adding to this Dhawan said, "The drop in viewership due to India being out is likely to result in to under deliveries making deals like associate or partner sponsor less cost effective as they come with a fixed cost."

Goyal also said that sentiment will be subdued for spot pricing in the upcoming India-New Zealand series, which starts in India on November 17. If India fails to perform again, then the ad rates and interest will soften even further.

Madhura Moulik, cofounder of Skilfinity, a digital marketing firm, said the impact of India’s exit from the T20 World Cup will be on the already designed and approved campaigns that anticipated big wins by Team India.

“These will not see the light of day anymore,” she said.

Even in 2016, when India failed to reach the semi-finals, the ad rates for the final matches of the tournament were impacted.

NV Capital’s Menon noted that ad rates will be affected because of the overall drop in viewership.

Dhawan added that daily active viewership is expected to definitely drop by a huge number of at least 50 percent.

In terms of viewership, on both TV and digital, it was the India-Pakistan clash that garnered the highest viewership. The October 24 match was the most viewed game of the tournament so far, reaching 167 million viewers on TV.

Overall, the ICC Men’s T20 World Cup registered a cumulative reach of 238 million on TV till last week, which includes the qualifiers and the first 12 games of the Super 12 stage.

On the digital front, Disney+ Hotstar, the official streaming partner of the tournament, attracted 12 million viewers at its peak during the India-Pakistan faceoff. For Disney+ Hotstar, the highest viewership was during the final of the 12th edition of the Indian Premier League in May 2019, when 18 million people watched.

“While the overall viewership has fared well on both the platforms (TV and OTT), with the exit of India, there would be dent in viewership,” said Menon.