Winning the IPL rights was a way to protect our portfolio: Star India's Uday Shankar

The Chairman and CEO of Star India on bagging the global media rights for the IPL for five years, taking Hotstar global and promising an exhilarating experience for cricket fans

Published: Sep 9, 2017

mg_99337_uday_shankar_280x210.jpgUday Shankar believes the controversies related to the IPL will not affect the game’s popularity
Image: Joshua Navalkar

 

In the first week of September, Star India won the global media rights—both broadcast and digital—for the Indian Premier League (IPL) for the period between 2018 and 2022. In the auction organised by the Board of Control for Cricket in India (BCCI) on September 4, it placed a consolidated bid of 16,347.5 crore, outstripping those of 14 rivals, including Amazon, Facebook and Sony Pictures Networks.

In an interview to Forbes India, Uday Shankar, 56, chairman and CEO of Star India, explains what factors worked in the company’s favour and the rationale behind the eye-popping figure. Edited excerpts:  

Q. Your winning bid was only 3 percent higher than the consolidated total bids. What was your strategy to arrive at the figure of 16,347.5 crore?
Yes, it was a close bid. There were multiple bids in six out of the seven categories. The margin tells you that our analytics was accurate and that the leaders in each category did a correct analysis. While there was aggression, it wasn’t unbridled; the entire bidding was calibrated and thoughtful. The process was driven by serious business—the potential bidders had identified their critical needs and were going after that. There was maturity in the bidding which reflects how you are going to use the asset in your business. Both for TV and digital, the clarity is much sharper today than it has ever been. There was no clear math to arrive at the number. You do triangulations by taking inputs from a macroeconomic standpoint, media sector, cricket and sports data, and from your own businesses. Then you arrive at a certain number.

Q. What was the rationale for bidding in all the categories?
We were the only ones with interests in all the segments—we have a TV and digital platform, so we wanted rights for both. We also plan to take our digital platform Hotstar global, so we were interested in the global category too. But we were clear; we’ll have both or neither. We already had the rights for digital and it had worked well for us. We debated and decided that to unlock the full potential of IPL, we should have both TV and digital rights. We’ve survived for ten years; not winning the bid wouldn’t have killed us. So we were willing to go with a focussed but risky strategy. At Star, we know what we want and are also prepared to walk away from things.

Q. Sony paid 8,200 crore for ten-year rights while you paid 16,000-odd crore for five years…

It’s not fair to compare the numbers. In 2007, IPL was an untested property. No one thought it was going to be a success. Twenty20 hadn’t matured and who would have thought that two cities playing against each other would work in India? So that’s the price that it went for [in 2007].

Q. Do you need to make more investments now?
We bid for IPL because it was important for us. Our BCCI rights [to telecast India matches] are coming to an end in March 2018 and given the competitive aggression, we couldn’t take them for granted. Winning the IPL rights was a way to protect our portfolio. Now, for five years, we have International Cricket Council (ICC) and IPL. We’re also investing heavily in non-cricket sports—kabaddi, football and hockey leagues—unlike other broadcasters here. Our commitment to that is high. Our investments are already deep, so we’ll have to be careful.

Q. What were your days like when you were crunching the numbers?
[They were] crazy and stressful. Facebook, Reliance Jio [owned by Reliance Industries, which also owns Network18, the publisher of Forbes India] and Airtel as well as the traditional media companies made their bids. And we had to figure out their appetite and strategy. In the last few days, I spent a fair amount of time with my team. At Star, we don’t make big decisions fast; in fact, we make them slowly, at the risk of frustrating outsiders who are observing the company. In the end, it paid off.

There’s no risk of losing TV viewers [due to digital]. Our TV sports viewership is up year-on-year.



Q. Are all controversies related to the IPL a thing of the past?
When millions of fans look at cricket, they look at the sport played on the ground and on their TV screens. Their expectations are clear—[they want] an exciting game of cricket. The IPL hasn’t dithered on that. So the politics, administrative issues and controversies are still around, but that’s only the front pages. As long as the front page doesn’t dilute the intensity and magnetism of the back page, the fans are happy.

Q. You spoke about taking Hotstar global. Could you elaborate?
Hotstar is only three years old but has become a definitive video consumption destination. This is despite India being a market where the legacy of video consumption is not that deep. Yet, every big global video provider is here—Amazon Prime and Netflix India, apart from other Indian ones. There are some intrinsic strengths in Hotstar, including the wide content portfolio between our sports and entertainment [Indian languages] categories. The South Asian diaspora has often envisaged interest in Hotstar and we are now ready to go beyond India to make sure content is available to the global consumers of Indian content.

Q. How do you plan to monetise it outside India? And what kind of future investments are you looking at for Hotstar?
Globally, the subscription ecosystem on digital is fairly evolved. Apart from initial advertising spends, we will be on the lookout for more content. But our current portfolio is quite compelling. We have already made all these investments—the IPL, ICC rights or the General Entertainment Channels—incrementally; we will have to align them to the specific needs of each market, which is a marginal cost.

Q. Are you planning to only target the Indian audience abroad? And will you translate your content into other languages?
The bulk of our content is specific to South Asians. We have a lot of content, but not everything will be available for all the audiences. We would be focussed in our approach and data driven—where we see an appetite for dubbing or subtitling, it will be done.

Q. Sony had post-match analytic content like Extraaa Innings T20. What can we expect from Star?
Star Sports is built on a simple premise—to be the richest and the best experience for sports fans. We are clear that our primary objective would be to ‘win’ on the basis of sports. The power of live sports particularly is so enormous that it doesn’t need any other ancillary support to drive it. The focus will be on reinventing, enhancing and deepening the overall experience visually, the quality of commentary, data and graphics.

Q. What can IPL fans expect in season 11?

We’d like to support the game on the field with everything we can do to further enhance that experience. While you can only do so much using interactive technology on TV, it is different for digital. We are innovating every day. Personally, I’m excited about Augmented Reality and Virtual Reality. It’s still early days for India, but we will be working actively on both.

Q. What would you like to bring in to Star and Hotstar from overseas sports broadcasting channels?
The challenge is to get the viewers to feel like they are actually on the ground, not even in the stadium. It’s a huge leap given the limitations of television, which has a slight disadvantage in this country because of the quality of distribution network. But on digital it’s a distinct possibility and it is that consumer experience that the whole world is working on. For us, Hotstar is not a platform, it is a technology company. We have 100 high-quality engineers both from Silicon Valley and the Indian Institutes of Technology (IITs), between our Mumbai and Bengaluru set-ups and their job is product development. We cannot just be a content provider; we have to create the whole product experience for people which can only happen by reinventing ourselves.

Q. With your focus on digital, is there a fear of losing viewership on TV?
The entire joy of watching a match on the big screen is different when you have HD and Dolby. TV broadcast goes to 780 million people and 183 million homes in India, and it is still the cheapest medium to consume unlimited video content unlike in Europe and the US where television is expensive and digital has emerged as a cheap alternative. In India, while data and broadband costs have come down radically, it’s still high. So there is no risk of losing television viewers. Our sports viewership on TV is up year-on-year and there has been a surge in consumption on Hotstar as well. The more people consume, the more they want to consume, so that’s not a risk yet.

Q. Are there any plans to tie up with the other bidders like Reliance Jio or Facebook?

A hundred percent. We are open to it.

Q. What is the unfinished business for the next year?
To make some money on IPL [says in jest]. It was all about winning IPL and now, it’s all about making it work for us.

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