Star Sports' big game plan

Star is in the middle of spending Rs 5,000 crore on bootstrapping sports viewing in a country of some 650 million cricketcrazy consumers. In doing so, Star India team aim to make sports the new religion in the world's youngest population: by taking broadcasting to local-level tourneys; producing sports programming in Indian languages; expanding beyond cricket into sports such as hockey, football, badminton and, even, kabaddi; and powering digital delivery of content via the Internet. Star Sports has taken many cutting-edge decisions such as being the first broadcaster to launch high definition (HD) sports feeds or offering Indian language content in the sports genre.

So what is Star Sports' game plan ? "It's a very simple sociological insight, that passionate consumers of sports are, sort of, surrogate players of that sport," Uday Shankar, Star India Chief told Business Today

He adds, "So unless the way sports is organised and distributed and played in this country, unless that changes, the landscape of sports will not change and the business of sports will not change. We are hoping to work with the sports authorities and the boards, to make local sports popular. It's a long-term investment; it will take a few years to break-even. If we fail to do that, then our punt will be wasted."

From just two channels Star Sports has grown into a sports network of six channels

Even if it comes with an expensive tag: it is paying the Board of Control for Cricket in India ( BCCI ) Rs 3,851 crore for broadcast rights until 2018, and it plans to invest Rs 1,000 crore to develop its sports business. This doesn't include the $335 million last year (about Rs 1,675 crore then) that News Corp paid for Disney's 50 per cent stake in the ESPN Star Sports joint venture nor the Rs 100-crore Star paid for ground rights in the IPL -6.

Today, excluding sports, the composition of Star's viewers is roughly 48 per cent female and 33 per cent male; the rest of the audience is children. With sports, it hopes to correct that ratio to 42 per cent female and 38 per cent male. A young male viewership adds appeal to advertisers selling to that audience. Sports targets the young male group, a category which the automobile companies and the telcos prefer to target. The sports business of six channels, currently housed under a company called ESPN Software India and accounting for about 20 per cent of the Star Group revenues in the country, will be brought into the Star India fold soon as Star has completed buy out of Disney's stake in ESPNStar joint venture. 

Some context behind the strategy first: sports in most developed markets constitutes almost 25% of the total TV viewing and revenues, while in India it is just 2% per cent. "We realised that most channels merely put live content on television and then slept over it. There was no meaningful content created to keep the buzz alive," says Star India COO Sanjay Gupta. A school-level hockey player, he believes there is a sports fan in almost every Indian.

Rs 4000 Crore Indian sports  revenue RS 1600 Crore Star Sports Network

Only India cricket matches played on home ground or in key markets get the desired viewership and life can be nightmarish for an ad seller if India doesn't do well. Sony lost some Rs 1,500 crore in the ICC World Cup of 2007 when the Indian team was out of the competition in the first stage.

Star Sports is betting big on DTH and digitization. There are 30 lakh Indians who watch tennis, 180 lakh who watch football. If Star Sports can get them to pay for the content it will make more economic sense and sportscaster will be less dependent on advertising revenue. 

How then does Star India team plan to monetise sports? The strategy, according to Nitin Kuckreja, President (Sports), Star India, is creating content around cricket. "We are going to experiment with innovative content - have interesting debates and analysis of various sports, do series of shows on the players, we may even try out sportsbased fiction," he says.

Star Sports besides cricket has rights to EPL, La Liga, Serie A, Wimbledon, F1 Racing, Moto GP, Hockey India, Australian Open, Indian Badminton League, Asia Cup Hockey, AFC matches

Star Sports Network has launched three cricket based shows, Champion of Champions, T20 Dhamaka and Jai Ho. Jai Ho shows Indian teams' big ODI victories while T20 Dhamaka shows some of the best T20 matches ever played. All these programs are packaged with Hindi voice over and English commentary. Not just cricket, Star has lined up non-live build up shows on badminton, football and hockey.

The plan to go upcountry involves creating a buzz around the Ranji Trophy and Deodhar Trophy as also introduce Indian language feeds of coverage to bolster the Hindi commentaries and analysis that was introduced last year. Next, "you may get to see cricket in Star Jalsha with Bengali commentary," says Gupta. Adds Kuckreja: "We have realised that language is a big deterrent in getting eyeballs. The commentators speak in English and the analysis is also done in English." And with the higher DTH density in rural India this investment promises big returns. 

This has kept the masses away from sports channels. India has about 125 million people consuming English commentary and, at some 450 million, more than three times are native Hindi speakers; some 85 million people speak Bengali.

Higher DTH density in rural India means Star Sports betting big on Hindi feeds

English Premier League, Hockey India League and Indian Badminton League are now telecasted in Hindi along with English feeds. Soon Tennis grand slams and Formula One may have separate Hindi feeds on Star Sports Network. And to cater to non-cricket viewers Star has launched new sports channel Star Sports 2.

Another quiet push Star India is making is into content delivered on its website, starsports.com.  The website has a paywall. Star has tied up with telcos such as Bharti Airtel and Reliance Communications, and has also launched applications for the iPad, iPhone and Android. Gupta says starsports.com got 10 million unique visitors when the site was at the beta stage, which has grown to 12 million. To put that in perspective, the Rediff portal gets 16million unique visitors. 

Star is betting to deepen the cricket market, to get viewership for non-cricket sports and to minimize advertising dependence. 

Courtesy : This story is based on  Master of his game published in July, first issue of Business Today. You can read original story here : Can Uday Shankar control all sports broadcasting in India.