We’ve all had our share of fun, ecstatic, fantasy and disappointing moments watching our favorite sports and athletes competing in the field. But have you ever wondered about the intricacies of the mysterious sports businesses of India. The grand sale of the IPL broadcasting rights to Star TV for a whopping $2.5 billion and the rising viewship of the Pro Kabaddi league in a land obsessed with cricket has opened new doors of opportunities to players, organisations and sports broadcasters, marketers and franchise owners in the business. 

The sports business in India is seeing greater participation of big corporate companies and global brands. This is a trend which is expected to grow and thus improving athlete funding and greater sports infrastructure development will be a key trend driving both youth participation and audience engagement in this genre of entertainment.

Here’s an interesting insight on this trend by industry vet Mustafa Ghouse, CEO JSW Sports about India’s strategic focus on making the country a global sporting powerhouse.

Mustafa Ghouse, CEO, JSW Sports

A simplistic indicator, but the number of sports channels measured by BARC has increased from 17 in 2015 to 25 in 2017. This shows the growth of the sports genre in India.

Cricket (led by IPL) continue to dominate the viewership share but rise in viewership was also witnessed in Kabaddi (Pro Kabaddi League) from 11% to 15% in 2017.

2017 has been a challenging year in terms of viewership for other sports. Wrestling recorded a drop of 4%, Football 3%, and other sports 5% as compared to 2016.

Viewership of the sports genre has for the large part been dominated by the urban male audiences but this % has significantly changed as more participation of women in sports have generated interest towards consuming sports content by the female audiences. 

IPL, ISL and PKL together witnessed female viewership ratio of 35-38% 
Launch of a free to air channel on DD FreeDish and DD sports took sports to a much wider audience resulting in viewership count of the rural population go up to 47% in 2017.
40-50 million Indians consumed sports content through the digital medium in 2017.

Key emerging trends driving viewership and business

  • Social broadcasting

Reaching out to the sticky young audiences will be the most crucial element and broadcasters will need to build interaction through social channels like Facebook and Twitter to reach the Millennial (Below 35) and Centennial (Below 25) generations. Interestingly both these groups consume content differently and it will be important for the brands and sports broadcasters to forge a unique strategy to reach each of these audience groups.

  • Increased data analytics in Sports

Sports leagues and teams are consistently using more data to make predictive models for activities like preventing sports injuries, play what-if analysis to engage audiences and improve player performances through analytics to identify weaknesses and track observations and trends.

  • Viewer immersion through real time participation

Fans are now rooting for an immersive experience more than ever. They want to feel closer to the action, the athletes, and the most riveting camera angles. Thus generating captivating and exclusive footage will be the name of the game for all sports marketers.

This is how the sports economy works

Sports revenues largely comprise central sponsorship (excluding on-air), team sponsorship, media rights (domestic and overseas across broadcast, radio and digital), franchise fees and local league revenue, ticketing and ancillary fees.

Broadcasting and media rights is the biggest source of revenue for most sports organisations and accounts for 55 to 70% of total revenues. Broadcasters who acquire the rights make money through royalty from the sale of exclusive footage to other media outlets. With the onslaught of digital, now additional revenue streams have come up from the sale of exclusive content and images online.  Periodic updates and the right to feature live score feeds of cricket matches is also a developing into a competitive market in India. 

In Quotes – “IPL has witnessed of growth of business value from $4.2 billion to $5.3 billion from 2016 to 2017.

Sports sponsorship grew at an impressive rate of over 19% in 2016 to INR 64 billion, an increase of INR 10 billion in comparison to 2015. 2017’s estimated figure was INR 82 billion, a 28% growth from 2016. The growth is driven by technological advancements and increasing availability and consumption of sports content online in India. Media spends was the biggest growth driver in sports sponsorship revenues in 2017. This grew from INR 28 billion to INR 35 billion, or 24.6% year-over-year.

Other business opportunities driven by growth in sports entertainment

The sports apparel market which includes clothing, equipment, shoes etc. is based in Jalandhar and Meerut and 70% of the sports apparel market is unorganized. In additio there are about 21,000 fitness clubs/gyms in India. The market is around INR 100 to 150 billion.

India is turning sporty

Broadcast rights are likely to remain a priority but sports properties are focused on innovative digital and immersive products to reach new audiences. deepen engagement and give more choices to customers.

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