Monday, October 24, 2005

Channels will lose Rs. 350 crores

My tracking on Sporting Rights to be shared with Doordarshan.

Business Standard says Sports channels will lose as much as Rs. 350 crores on subscription revenues.

Sports channels get 50% of their revenues from subscription (apparently this number is 25% for other channels). If feed must be shared with Doordarshan, no one will subscribe to the sporting channels - well, a small number of people would. So the only revenue will be advertisement revenue.

Now, at this point, a sports channel can as well close their channel and become a rights hawking agency, since the "high interest" feed will be on Doordarshan, for which someone else may do the marketing. So the only revenue available will be 75% of the airtime marketing money in India.

ESPN Star Sports MD RC Venkateish seems to have come up with the most vocal opposition: "This is a clear violation of intellectual property rights and a very negative move by the government. The government has not taken any recommendation by the industry into consideration."

A head of a foreign broadcaster (name not indicated, I suspect Ten Sports) seems to have said: "We see both advertisement and subscription revenue coming down as a result of this. It makes business completely unviable."

However Business Standard makes a mistake with the following statement... "For cricket broadcast, private players will have to share live feed with Prasar Bharati even if rights are acquired before the notification of the new policy. Thus, Sony, which has broadcasting rights for the next Cricket World Cup, will have to share feed with Prasar Bharati."

Sony did not acquire Terrestrial rights for this event in India. As such, ICC and GCC were well within their rights to sell terrestrial rights to Prasar Bharati last time. They will continue to do so this time as well. Now, would Prasar Bharati enfore ICC to give the rights to them on a 75-25 sharing ratio? ICC can refuse and simply not offer the feed. They may want outright money. The govt. can force Sony to share the feed for terrestrial broadcasts, since Sony never bought that from ICC.

Ah, here is an interesting issue. A private operator can do a deal with the original rights owner - the BCCI or ICC etc. The deal would be as follows. ICC shall not sell terrestrial rights to anyone in India. It shall be extinguished. ICC sells only the satellite rights to Sony (or ESPN etc.). Now? The govt. of India cannot force the private satellite operator to offer the feed to them, since the private operator has no right to share something that they do not own.

I would like to see someone test this theory. The courts will side with the private operator.

DNA has an article as well, no new insights though.

My previous posts in this topic:
Tracking Government's Sports Rights policies
DD to get feed of vital sports events from all channels

No comments:

Post a Comment