Cheap data feeds Rupert Murdoch’s Indian Premier League pitch
Rupert Murdoch’s Star India bid $2.6 billion for the global rights to the Indian Premier League, something that makes sense given massive fall in the price of mobile data in India and rising penetration of internet-enabled phones.Updated: Sep 07, 2017 14:08 IST
Rupert Murdoch knows better than anyone that content is king. The media mogul, through his unit Star India, this week agreed to pay $2.6 billion for the global rights to the Indian Premier League (IPL).
The huge outlay highlights the brash sport’s rapid rise and a race between traditional television and new digital players to secure content.
The unit of New York-listed Twenty-First Century Fox has secured broadcast rights for television and digital platforms for five years to 2022. Sony paid about half that amount to show the IPL for nearly twice as long and only on television.
New rivals such as Facebook and telecom operators Bharti Airtel and Reliance Jio were prepared to hand over as much as $600 million for just the digital rights.
The final sum is extraordinary for a barely 10-year-old sports franchise, famous for its fast Twenty20 format games, scantily clad cheerleaders, and big business-backed teams.
But this could still be a good catch for Murdoch. The IPL already has 400 million viewers, a number that has doubled in just two years, according to valuation firm Duff & Phelps. And the payout mirrors the rush for other content in India; Apple is eyeing the film and music library of Eros Group, a top Bollywood producer.
The bet is that the audience for premium content will grow. With a massive fall in the price of mobile data in India and rising penetration of internet-enabled phones, Counterpoint Research estimates as many as 650 million more Indians will come online by 2022.
That’s critical given Sony earned just $200 million from the last IPL season in advertising revenue, according to UBS. Unlike in other markets, that’s the main source of income for Indian TV broadcasters, contributing nearly 70 percent of total revenues - and helps to explain the torturously long ad breaks.
A near-monopoly on Indian cricket, alongside ownership of other key tournaments, will also give Star improved pricing power with advertisers. That makes Murdoch’s pitch look a little less aggressive.
(The author is a Reuters Breakingviews columnist. The opinions expressed are her own)