Mar 11, 2007 09:17 PM
9653 Views
(Updated Mar 13, 2007 10:16 PM)
I am writing this review here, because Neo Sports is yet not titled on Mouthshut.com
Sports rights’ wars erupted in a major way in late 80’s. Media Barron Mr. Rupert Murdoch(a good friend of then British Prime Minister Ms. Margerate Thatcher) was planning to launch SKY TV through a British satellite. But he lost the bidding to five giants who had formed British Broadcasting. But even before the planned British satellite could be launched, Mr. Murdoch launched his SKY TV via another French Satellite and took an un-assailable lead in Europe.
Later the British satellite was also launched and the RIGHTS’ WAR started, with both the companies trying to overbid each other especially for movies & sports’ rights. By the run of time both understood that this over bidding made their business lead nowhere, because both were unable to generate enough revenues to meet their high costs, mainly due to over-bidding. And both finally formed a joint venture company, which we know today as B-SKY-B.In 90’s their were only two sports channels in India viz. ESPN & Star Sports, both were competing, bidding for sports rights fiercely.
They could not generate enough revenues to support their high bids and finally merged by the end of the century to be known as ESPN-Star Sports. In Asia Star TV is the leader, which Mr. Rupert Murdoch had bought in stages from the promoter Richard Lee of Hongkong.Still similar are the conditions nowadays in India where the sports channels keep trying to overbid each other viz. ESPN-Star Sports, SetMax, Zee Sports, Ten Sports and now Neo Sports(all pay channels). While DD Sports remains a free-to-air channel. Though as a viewer, we were enjoying these business wars, but the recent court room scenes between Neo Sports & Prasar Bharti tell - something somewhere has gone wrong.
Millions of Indian Television viewers had to miss the major portion of the last India-Lanka one day series, because Neo Sports was not visible & Doordarshan had no live-telecast rights.Nimbus bought the telecast rights for the Indian Cricket in India from BCCI for Rs.2800 crores, and subsequently launched their own channel called Neo Sports. It is a huge sum, which no other channel could to bid. And then Neo Sports wanted 75% revenue share of Doordarshan for the live-telecast rights of Indo-Lanka series, that too under the condition that Doordarshan also encrypt it’s signals, so that they are not available free-of-air. And… the viewers suffered. Who is the culprit?Let us try & CALCULATE the culprit. At their launch Neo Sports wanted a fees of approx. Rs.57/- per subscriber per month.
Is it a viable fee structure, because Neo Sports has won over the rights for Rs.2800 crores & now wanting to recover the same? If the similar trend continues, and other premium channels also try charging approx. Rs.50/- per TV subscriber per month, then for approx. 30 premium channels each subscriber will have to cough out Rs.1500/- per month. Thus for watching a bouquet of say 60 channels(including 30 premium & 30 non-premium channels), TV subscribers may be required to pay approx. Rs.2, 000/- per month at minimum. Surely Indian economics won’t afford such monthly television viewing charges and the rate demanded by Neo Sports is a blackmailing tactic to recover the costs, which are not really recoverable.But greedy BCCI should have calculated this at the time of tendering the rights.
Neo Sports was no-where visible(was not even launched). Why should BCCI overlook Indian viewer’s sentiments and award the rights to Nimbus, just because they are the highest bidders(the Bid that no other running Sports‘ Channel could dare match). Firstly BCCI should have ensured that the bidders are genuine sports channels having a sound viewer ship. If this trend continues, then Reliance(who are also planning to jump into satellite channel industry) may also bid more than Rs.5000 crores for the similar rights, next time. And then the problems will shoot-up, because such bidder will definitely ask for approx. Rs.100/- per subscriber/month for a single sports channel.
Such huge viewing charges are un-affordable for an average Indian. So, why accept a bid, which is not really recoverable at all? BCCI makes money because we all are Cricket Crazy, and now BCCI’s greed has made them overlook the interest of the crazy viewers. How do the channels make money? It is by two ways, firstly advertising & secondly pay-tv subscriptions. Normally advertising revenue is 80%, while the pay-tv revenue stands on average at 20% of the total revenue share. But in case of Doordarshan it is only advertising revenue, as none of their channels are pay.
So, who earns more? Well, it is only Doordarshan. No private broadcasters, not even Star, Zee or Sony can dare touch DD’s revenue figures. On their own, none of the private broadcaster can dare touch even 50% of the revenues, which Doordarshan generates.Still, greedy Neo Sports wanted 75% revenue portion of Doordarshan’s revenues for live-feed share, while Doordarshan had offered 50-50 revenue sharing. This 50-50 sharing would have been a revenue, Neo Sports can’t earn on their own, not even in their dreams, but still they did not agree. Over that they wanted Doordarshan to stop the feed for-free on their terrestrial signals, meaning hardly any up-country viewing..
By asking Rs.57/- per subscriber/months Neo Sports has put a barrier to its viewer ship, and hence suffered on the major advertisement revenue. Also, by not accepting Doordarshan’s offer of 50% ad’ revenue sharing, Neo Sports tried losing on all revenue fronts.Most of the broadcasters tend to forget that sports revenues in India are directly proportional to the cricket crazy viewers. If you block the viewers, revenues will stop flowing. Every sports channel in India has developed a tendency to blackmail the cable tv operators, just before any major sports event. Many times, the broadcasters switch off signals to various cable operators, just before a mega event, and the cricket crazy fans lose out.
Despite the fact that it is the viewer’s craze only, which is spinning money(major advertising revenues) for all these sports channels. All such channels can generate a better overall revenue from advertising itself, by showing all mega events on free-to-air basis. Because free-to-air will mean more than double viewer ship amounting to more than double advertising revenues. And such Advertisement revenues can never be achieved by pure Pay-TV revenues.Not to worry, better late then never, Govt. of India has made it mandatory for all broadcasters to share live-telecast with Doordarshan for all Indian Cricket or major sports events. So now poor viewers can relax, and hope the BCCI & NEOs learn some lesson from it.
