Whether Indian cricketers would regain form is a matter of debate, but one thing that is not is that TV channels would be back in demand with advertisers in no time.
NEW DELHI: Whether Indian cricketers would regain form is a matter of debate, but one thing that is not is that TV channels would be back in demand with advertisers in no time.
Corporates and advertising agencies, who had built their ad campaigns around the World Cup and had to rework plans owing to India's exit from the tournament, are sure to stick to television for promotions.
This withdrawing of ads is unlikely to have implications for channels in the long term, leading research house Citigroup has said in a report.
"We do not believe that India's exit in the preliminary stage of the World Cup will have any far reaching structural implications or alter the course of media industry's growth drivers," Citigroup analyst Princy Singh said in the report.
Rejecting concerns that popularity of cricket is likely to decline significantly and that advertisers would be unwilling to pay premium rates, Citigroup said, "Overall, we do not see a structural decline in advertising rates on cricket."
Some small advertisers may have pulled out their ads but their bigger counterparts are likely to stick, the report said.
However, team India's early exit would see prime time viewers shifting from World Cup broadcasting channels, Set Max, SAB TV and DD, to general entertainment ones.
With people shifting attention towards entertainment channels, Zee would have a positive impact on its viewership, Citigroup said adding that 'from an advertising revenue perspective, implications for Zee are likely to be marginal.'
Citigroup projected that ad budgets may get diverted only to the extent of some spot-inventory (five per cent according to media planners) for World Cup matches that Sony still holds, but this is unlikely to make a significant negative impact on the ad-revenue growth for competing channels.
"We have invested in the game, not on India's performance. People will still watch the games despite the virtual exit of India from the tournament," Girish Rao, Vice-President (Marketing and Sales) of LG, one of the official sponsors of the World Cup, had said.
According to industry estimates, Sony is expected to rake in over Rs 500 crore from advertisements during the 52 matches to be played in the World Cup.
The calculation is based on the estimation that a 10 second slot is sold at about Rs 1.5 lakh for the 52 matches.
An industry analyst pointed out that Set Max could, however, incur a loss of about Rs 70-80 crore on account of unsold inventories as a result of India's virtual exit from the World Cup.
Citigroup said advertisers will come back to TV channels as soon as the Indian team gets back in form.
"We believe that a couple of good performances by the Indian cricket team will be enough to lift sentiment and drive ad-spent back to the genre," the report said.
"If at all, endorsement of cricket players may suffer, but ad-yields on cricket are unlikely to come off," it added.
There would also be near term slowdown in Direct-To-Home (DTH) sales as both DISH TV and Tata Sky resorted to cricket oriented marketing strategy.
According to DISH TV management, sales during March had accelerated to about 1,40,000 sets against an average 80,000 to 90,000 sets per month.
Although DTH sales have started to tapper off, yet sales figure are unlikely to slow down beyond the pre-World Cup growth rate. This, in other words, means that the DTH-led set top box penetration story remains intact, the report said.
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