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Coronavirus Impact: Why IPL may see a drop in attendance in stadiums

Venkata Susmita Biswas
Growth in ad spend for 2020 is estimated to be about 9% with a recovery expected in the second half of the year as per GroupM's This Year Next Year forecast for the year.

The 13th edition of the Indian Premier League (IPL), all set to begin from March 29, could see a drop in ticket sales as Indians restrict movement to avoid the spread of the novel coronavirus.
Even though BCCI president Sourav Ganguly has announced that the tournament will go on as planned, the rise in the number of people infected could result in a majority choosing to watch the game indoors on their TV sets or mobile screens.

"A good part of the ad revenue has been locked in by the broadcaster, and the pandemic may not impact ad rates. If there are more cases that are identified, stadium ticket sales could be negatively impacted," DCMN director for offline media Sudhir Kumar says.

As per industry estimates, nearly 30,000-40,000 people watch a match live at the stadium. Money earned from ticket sales of a match in the home city of a team goes to the franchise owners. A team stands to earn `8-9 crore from one match played in its home city.

Additionally, advertisers are expected to be cautious about buying ad spots on the annual cricketing tournament. This is a result of the slow growth in advertising spending due to the ongoing economic slowdown.

Growth in ad spend for 2020 is estimated to be about 9% with a recovery expected in the second half of the year as per GroupM's This Year Next Year forecast for the year.

Despite this cautious sentiment of advertisers, Star India, the official broadcaster of the 57-day long sports league, is said to have set itself a target of earning more than `3,000 crore from the IPL this year -around `1,000 crore more than last year's target.

The broadcaster has locked in a total of 12 sponsors, including Tata Altroz, FBB, Dream11, Paytm, CEAT, Phone Pe, Amazon Prime, Asian Paints and Coca-Cola. The associate sponsorship rates for IPL 2020 have increased by about 15-20% over last year and are in the range of `60-80 crore.

Ten second ad spots too are being sold at a 15% mark-up over 2019 at `13-15 lakh. "Brands, especially sponsors, typically set aside budgets for this annual media event much in advance. That said, brands may look at buying shorter ad spots to optimise their total ad spend because of the slowdown," says Havas Media CEO Anita Nayyar.

The IPL ecosystem, which is a marquee media event of the year, was estimated to be worth `47,500 crore in 2019, registering a growth of 13.5% over 2018 by Duff & Phelps. Typically only brands with very deep pockets get associated with the property, Aditya Birla Capital chief marketing officer Ajay Kakar says. "That's because the investment in IPL itself is significant. Irrespective of whether on TV or digital. And to top that, significant spending is warranted to top it and promote the association. And lastly, a brand will not wish to be one that is visible only for two months. So it is assumed that they would have separate budgets set aside to create visibility for the rest of the year, too," he adds. Therefore, brands that are under stress will be holding back on spending on the IPL which demands high investment.

"Brands are buying advertising inventory at a premium also in the hope that the broadcaster will open up its general entertainment channels to the IPL this year the same way it did last year," Kumar points out.

While Star India has increased the television advertising rates and sponsorship fee for this year's IPL, digital ad rates have stayed the same as 2019 at `120 CPM (cost per mille) per 10 seconds. An additional layer of targeting comes at a fee of `120. Advertisers can target consumers based on gender, device, and four interest groups — e-commerce, travel, fashion/lifestyle, and finance on Hotstar.

As per Hotstar's India Watch Report, last year the streaming service recorded a reach of 300 million viewers during IPL 2019 and 65% of the total consumption of the matches came from non-metros. Analysts say the digital arm of the broadcaster has established itself as the primary online destination for watching cricket live.

"Therefore, this year Hotstar's focus area is less of scale and more of retention. And it is leaving no stone unturned to offer a wholesome and interactive experience through additional engagement tactics it has built on its platform," WATConsult EVP, media and operations, Sahil Shah says. As per Hotstar's data, 64 million people played along live during IPL 2019 and those who played along spent 1.5 times more time than those who did not.

Over the last two years Hotstar has addressed the concern over retention by first introducing gamification through Watch'nPlay and then the experience of social media through emojis and commenting. The streaming platform has not announced any further additions to the match watching experience this year. It is pitching itself as a platform with the "lowest pricing on live sports" with a reach of 400 million. The platform is expecting to add 100 million more viewers to its reach over last year.

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