'Broadcasters under pressure to advertise'

The high cost of broadcasting rights, the low subscriber prices for TV channels and under-declaration by cable operators have created greater pressure on cricket broadcasters to generate revenue through ad sales, Atul Pande, a top official of the organisation owning the Ten Cricket channel, has said. Ten Cricket was issued a show-cause notice by the Indian government's Information and Broadcasting Ministry for violating the country's advertising codes during its coverage of India's tour of South Africa. The channel's advertisements were deemed to be interfering with the programme, prompting the government to seek an explanation from the broadcaster.

"Given the status of rights fees for most of the Indian tours you've got broadcasters trying to generate as much revenue as possible. It's possibly leading to a clutter of advertising across all channels because they have to also monetise the property," said Pande, the CEO of Sports Business, Zee Entertainment Enterprises Limited. "The underlying principle is that there is a significant amount of pressure to monetise Indian cricket events, and the monetisation structure is such that there is pressure to generate money through ad sales."

Apart from high rights fees, Pande said the relatively low cost of subscribing to Indian TV channels was another problem facing broadcasters. "The Indian consumer, or subscriber, pays a very little amount of money to watch very high-quality sport. Possibly the lowest in the world. Even if you bought all these sports channels today on a-la-carte prices, you'll still not pay more than say Rs125 a month. And you have access to virtually any live sporting event in the world.

"The other issue is the way in which cable pricing is administered in India which is that most cable operators under-declare and therefore the revenue which comes to the broadcaster is much lesser than it should be."

For sports channels across India, cricket, and especially Indian cricket, generates 85% of ad revenues, Pande said, and other avenues to monetise were limited. Broadcasters, he claimed, were not being greedy to maximise profits but were making losses. "We are struggling to pay our bills during cricket events. You look at the profit and loss numbers of two businesses that are listed. One of them is ours - we are a subsidiary of a listed company - and the other listed company is another Indian sports channel that is now trying to go for an IPO. Both these businesses lose money."

Though Pande admitted broadcasters were willing to cut down on intrusive advertising, he called for contracts between cricket boards and broadcasters to be structured in a way that would protect the interests of the latter. The cost for the broadcaster, Pande said, was also affected by a law that called on them to share feed with the public broadcaster, Doordarshan, as in the case of the India-South Africa ODIs. "It also precludes the value of the event to the broadcaster because it increases inventory, and the pricing also gets impacted for the broadcaster's channel."

A possible solution, Pande suggested, for the current problem was a premium fee paid by the consumer for ad-free coverage; England and Australia follow a similar model. "We are more than happy to give an ad-free feed at a higher price. If there is a customer who wants to look at uninhibited watching of a cricket event, and he is willing to pay a price for it we are more than happy to provide a service. We need to get a license expeditiously for that kind of a service, and we should be able to price it the way we want to price it. It's like any other premium service; if the customer is prepared to pay a premium price for it, he gets a premium service."

Ten Cricket was launched in August 2010 and prior to airing matches from India's tour of South Africa, also broadcasted the series between Pakistan and South Africa held in the UAE.