IPL Aggressive Marketing or Futuristic strategy?

Presented by Dipak Jain

Introduction
Launched by BCCI on the line of Footballs English
Premier League and National Basketball League (NBA) of the US. Professional Twenty20 cricket league created and promoted by BCCI and backed by ICC. 8 teams, 44 days, and 59 matches. Total base price for auction was $ 400 million and fetch $ 723.59 million. Most expensive franchise is owned by Mukesh Ambani $ 111.9 million. MS Dhoni and Andrew Symonds emerged as the costliest Indian and overseas player respectively.

Cont
DLF Universal secured exclusive rights to the IPL title

sponsorship worth Rs. 200 Cr (over $50 mn) for 5 years. Indias Sony Television network and Singapore based WSG secured broadcasting rights at a cost of $ 1.026 bn for 10 years. Bring income of $ 1 bn to BCCI over a period of 5 to 10 years, out of which 40% will go to IPL, 54% to franchise, and 6% as prize money until 2017. Out of $ 1.026 bn, $ 918 mn to BCCI and $ 108 mn for the promotion of the tournament. 20% would go to IPL, 8% as prize money, and 72% would be distributed to the franchisees until 2012. Double round-robin and knockout.

Future Expansion
Four new franchisees will join IPL in 2010-11. Two confirmed franchisees will be based in Ahmedabad
and Kanpur. In 2012-13, two more teams will join the IPL. Possibly second franchise from Delhis suburbs. Possibly second franchise from Mumbai or new franchise from Pune. For 2009 season tentative dates for the IPL will be April 10th, 2009 to May 29th, 2009 and format of the tournament will remain the same as that of the inaugural season.

Profit or Loss?
Franchise Mumbai Indians Royal Challengers Banglore Hyderabad Deccan Chargers Chennai Super Kings Delhi Daredevils Kings XI Punjab Kolkata Knight Riders Revenues (in Crores) 69 45 64 72.8 70.4 66 89 Expenses (in Crores) 85 88 82 73 77 68.4 76 Profit/loss (in Crores) Net Loss 16 Net Loss 43 Net Loss 18 Net Loss 0.2 Net Loss 6.6 Net Loss 2.4 Net Profit 13 Price (USD) $ 111.9 mn $ 111.6 mn $ 107 mn $ 91 mn $ 84 mn $ 76 mn $ 75.09 mn

Rajasthan Royals

59

53

Net Profit 6

$ 67 mn

ICL vs. IPL: The Competitive Edge

Solid backing of BCCI and ICC with almost 10 huge

stakeholders whereas ICL has a single promoter Essel Group. IPL is playing a safe game while ICL wants to create a new league of talent from upcoming aspirants. IPL seems to be attractive business model involving high level risk while in ICL level of risk is comparatively lower.

Research Analysis
A research was

conducted across 400 people in the city of Nagpur. 83% said Yes and 17% No

Exhibit 1: Did You Follow IPL Matches on TV

17%

83%

No Yes

Cont
44% did not miss a single
match, 38% favorite teams matches only, 12% match highlights, and 6% only on holydays, sundays and weekends
Exhibit 2: Matches on TV Frequency

12%

6%

38%

44%

M atches highlights only M atches of favorite teams only

All the matches (daily) only on holidays/Sundays/Weekends

 58% found a sustained

interest level throughout the match, 34% surfed through the channels and 8% are not interested

Exhibit 3: Sustained Level of Interest Throughout

8% 34%

58%

To an extent

Yes

No

 63% because of crisp

timing, 29% others factors attract them, 5% said that Bollywood stars tempted them to watch, and 3% found entertainment value

Exhibit 4: Attraction Factors

70 60 50 Percentag 40 e 30 20 10 0

63

29 5 Bollyw ood stars

3 Entertainment value Factors

 62% preferred 8 to 11

pm, 12% no specific time to watch TV and equal number preferred to watch TV after 11 pm, 9% preferred afternoon slot of 2 to 5 pm, and 5% preferred morning time of 7 to 9 am

Exhibit 5: Preferred Time Slot on TV

70% 60% 50% Percentage 40% 30% 20% 10% 0% 62%

5% 7.00 to 9.00 am

9% 8.00 to 11.00 pm Time

12% 12% No specific time

 Only 24% did miss out on

their favorite TV programs, and 76% answered negatively

Exhibit 6: Missed Out on Favorite Program

24%

76%

Yes No

 60% said that IPL

brought about a change in their viewing habit, 11% said that viewership pattern changed to certain extent, and 29% felt that it did not affect their viewership pattern in any way

Exhibit 7: Change in TV Habit

11% 29%

60%

To an extent Yes No

 38% feel that TRP of

reality shows affected the most, 30% feel news channel would have suffered that most, 28% said family soaps were affected, and 4% feel that other channels affected

Exhibit 8: Effect of IPL on TRP

Family Soaps

28%

Reality Shows

38%

News

30%

Others

4%

 78% said Yes IPL is

better than ICL, 14% said No, and 8% said to an extent it is better than ICL

Exhibit 9: Is IPL Better than ICL

14%

8%

78%

To an extent

Yes No

 37% feel that IPL is all

about aggressive marketing, 31% said that great futuristic strategy, 26% feel that IPL is just a 45 days of masala, and 6% feel it is threat to TV and cinema

Exhibit 10: IPL for me 6% 31%

26%

37% Day 45 masala of pourri Futuristic strategy Only aggressive marketing Threat to TV and Cinema

Conclusion
IPL is a winning formula, its marketing and crisp timing

being its USP. It also has the potential to beat the prime time TV shows as is evident from the views of people. According to Hemant Vasu Vidarbha, IPL needs to keep up to its expectation. IPL needs to create loyalties not just for the states the teams represent, but for the playing teams as well.