Thread by @KShriniwasRao

#Thread #MediaRights (read while you watch the game) : )

Soon as BCCI brought out the tender, you’ll must have read some fancy headlines: “Gear up for a face-off between Mukesh Ambani & Jeff Bezos”.

Very big names these are and bound to grab all the attention.

(1/25)

Yes, it is about these men but also about other players in the industry – however big or small – and they’ll all look to participate in the bidding process, or at least study it carefully – from the perspective of Package ‘C’, more than anything else.

(2/25)

Package ‘C’ (or Pkg 3) of IPL Media Rights Tender is what makes this entire bidding process extremely interesting and threatens to take the overall value to those steep numbers that the industry is busy speculating.

So, what exactly does this package entail?

(3/25)

Before I explain this, here’s a thread I did, detailing packages. In case you didn’t read about Package ‘C’ here, please do check so that it gets easier for reference.
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https://twitter.com/KShriniwasRao/status/1509519958564544520?s=20&t=OrDBi6sQ9kCS8JgzGu51Aw

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And remember -- only one party will laugh all the way to the bank: BCCI : )

(4/25)

Base price per match for Package ‘C’ is Rs 16 cr / game & it has a cluster of 18 games – opening match, four play-offs, & night matches of double-headers on weekends.

At 90 matches over 5 yrs (at Rs 16 cr per match), collective base price of the package is Rs 1440 cr.

(5/25)

This package can be potentially non-exclusive (shared by two broadcasters) and should one broadcaster want it exclusively, they will have to pay a very heavy delta to grab it.

Pkg A is TV, Pkg B is digital, Pkg C is what we’re discussing, Pkg D is rest of the world.

(6/25)

Winner of Pkg ‘A’ shall be a bidder with expertise in Linear Broadcast – who would’ve won through an intense/competitive process.

But BCCI expects higher competitive intensity in Pkg ‘B’ – among Digital players, whose valuations are dependent on subscription growth.

(7/25)

Talking of subscription growth -- we’ve seen that in the case of Disney (Hotstar).

Investing in sports broadcasting has been a good customer acquisition – where IPL is one of the marquee sports events globally. It has been essential to growth in subscription numbers.

(8/25)

Package B Licensee has right to stream all 74 matches, while the Package C Licensee streams only 18. Core cricket viewers will always continue to subscribe for ‘All Matches’ package.

Exclusivity for 56 non-Special Package matches will ensure subscriptions stay intact.

(9/25)

So, winner of Package ‘B’ has access to all 74 games, except it’s not exclusive. Bidding for Package ‘C’ shall not make sense unless they want exclusive access for all games. However, cost for such exclusivity will be too high (should they re-bid for Package ‘C’).

(10/25)

Let me share an example.

TV18-Viacom bids and wins Package ‘B’ (all 74 – digital) but Amazon wins Package ‘C’ (18-match cluster & all imp matches). Both parties can show the respective matches live.

But the entire bouquet of 74 is not exclusively with either party.

(11/25)

Now, if TV18-Viacom doesn’t want to share matches with Amazon, and wants all games to be exclusively with them, then what happens?

In that lies the story to how and why Package ‘C’ is important and can take this whole bidding war to the next level.

(12/25)

Then, winner of Package ‘B’ can challenge the winner of Package ‘C’ for another round of bidding.

Potentially, there are two scenarios:
1) Winner of Package ‘B’ also wins Package ‘C’.
2) Winner of Package ‘C’ is different from winner of Package ‘B’.

(13/25)

If it’s the first scenario, that’s the end of the story. If it’s the second scenario, winner of Package ‘B’ can go into a re-bid with winner Package ‘C’.

If all other bidding parties are out of the race, Pkg B & C winners can keep upping bid until the cows come home.

(14/25)

The delta in this re-bid is way too high. Each higher bid goes up by 5% of the real-time value (the number that’s being bid). Potentially, a single bid can be to the tune of Rs 175 to Rs 200 cr.

That’s the ‘Ambani-Bezos’ clash that media is building up.

(15/25)

Objective of Package ‘C’ predominantly is also to attract customers (who are not digitally active) into the Digital viewership experience. It is also an entry for Package ‘C’ Licensee into Sports broadcasting segment.

(16/25)

Customers of Package ‘C’ could become potential future customers for Package B – by way of sub-licensing (which is quite possible) and the winner of Package ‘C’ could become a potential bidder for Package B in the next media rights cycle.

Why not?

(17/25)

Package ‘C’ also gives clarity to Package ‘B’ Licensee that subscribers / viewers for those Special Package games are digital savvy customers – for whom targeted Ads can be displayed (hence increased rates). Both Ad rates & subscription can be availed across matches.

(18/25)

There’s only that much that a broadcaster will bid to get TV rights & digital rights. But Pkg ‘C’ is about exclusivity and taking full control of the vast e-retail / telecom market India is. You think Bezos will mind losing a billion dollars to retain that control?

(19/25)

Potentially, who could bid for Pkg ‘C’?

TV18-Viacom, Sony, Disney, Zee, Amazon, MX Player, Willow, Discovery, Airtel, Vodafone Idea, Fancode, YuppTV, Flipkart, Meta, YouTube, Apple TV, Sky Sports (Comcast), DAZN, BT Sport, BeIN, Supersport, Fox Sports, etc.

(20/25)

Fancode, for instance, picked up the tender a couple of days ago.

There’s major fight right now between Instagram, FB Shorts, YT & other mediums for shorts / reels. Cricket is a huge product on this platform. These are battles within battles.

(21/25)

Expect the bidding for Package ‘C’ to take this whole media rights sale to the next level.

TV18 (with retail & telecom in the backend), Amazon (looking to gain turf in India), Disney (possibly partnering with a telecom player) – they’ll drive this.

(22/25)

If I had to take my guesses here, I still see one party walking away with everything. Any company will find returns from such an investment only when they have a bigger canvas to paint.

Imagine if Star had won TV in 2017 but lost digital to Facebook!

(23/25)

Big numbers are being thrown in right now. Someone had said a couple of months ago, the rights will sell north of 40k crore. Recently, someone said it’ll touch 50k crore.

I’ll make a guess too. I’m saying rights will sell beyond 60k cr. : )

(24/25)

Why?

Because this is not about cricket. It’s about you, the customer. As a player in the content industry, backed by telecom / data / e-commerce etc – I want your complete attention.

I’m waiting to enter your living room. : )

(Ends)