Not here for a price war to buy IPL, ICC media rights: Disney Star

Media giant Disney Star India will not indulge in a price war, even though it is looking at retaining the media and broadcasting rights for two blockbuster cricket properties – IPL T20 and the ICC cricket tournaments – which come on the block this year, provided they fit in with the company’s business plan.

Speaking on a range of topics, including its strategy for the much-anticipated and highly competitive bidding for the two mega cricket rights, K Madhavan, president of the Walt Disney Company India and Star India, said they would work towards retaining the cricket properties.

“We are bullish and in investment mode, provided it works within our business case and business plan. We are not here for war or buying something for the sake of getting one property. If someone offers 10X for the property we are not there,” he said.

According to experts, broadcasting and digital companies are expected to spend over Rs 40,000 crore to join the country’s biggest-ever auction of sports rights next year and they may pay double what Star had paid for the rights earlier.

That is because new players – the merged Sony-Zee duo and Viacom 18 in collaboration with Uday Shankar-James Murdoch – are expected to make aggressive bids, in addition to Amazon Prime.

The rights include the five-year broadcasting and digital rights which begin from 2023 for the T-20 IPL. It also includes the auction of rights held by the ICC whose eight-year contract for broadcasting and digital rights for various World Cup championships ends in 2023.
Madhavan, responding to the impact of the Zee-Sony merger, said the industry ‘will be a very interesting space’ in India in the coming days. “There is huge scope for growth in linear TV and digital. And we accept any competition. It is not a threat but good for the industry.”

But clearly sports, which is dominated by cricket, is not all that Disney Star offers. With an overall market share of 30 per cent in the TV broadcasting space, Madhavan says it is far ahead of its nearest competitor which is at 17-18 per cent (though once Zee-Sony merges, it will be pretty close to Disney Star).

Madhavan points out that sports accounts for only 2-3 per cent of its total network market share of TV. The market share only goes up in spurts in cricket such as in the 60 days during the IPL to around 31-32 per cent.

“A top-rated Hindi serial gets a TVR of 4-5 and cricket is also at the same level. And in digital there is a wrong perception that we survive only on cricket. However, nine of the 25 top Hindi series on the SVOD platforms in 2021 belong to Hotstar-Disney. And we also have a huge library of global content from Disney on OTT,” he said.

Madhavan is also betting on the growth of the TV broadcasting business. He said that, unlike in developed markets where growth is slowing, linear TV will continue to grow for five or six years, along with digital which will grow faster.

“Only a third of the 300 million households in the country have pay TV. Currently the pay TV market is 110-120 million. The overall number of TV households is 200-210 million. But there are another 100 million who do not have any TV at all. So we expect linear TV will grow in viewership by 7-9 per cent and digital by 20-25 per cent annually,” said Madhavan.

He points out that even the penetration of TV channels differs from region to region – in Tamil Nadu, Kerala, and Andhra Pradesh, it is over 95 per cent, but in Bihar or Chhattisgarh, it is 50 per cent. The average in the country is still 60 per cent.

He ruled out the possibility of Disney going in for the acquisition of media companies in light of the Sony-Zee merger or buying production houses, as Reliance Jio has, to have a say in the content.

“We are already there and all areas are covered. We don’t need to buy something and duplicate it with what we already have. Secondly, we have the freedom to choose content from various producers. If we acquire a company, we will be confined, so our scope to get into content is limited,” said Madhavan. Business Standard