New teams, more matches, more ad-revenues - has IPL reached its peak?

Source: exchange4media.com

The addition of two new teams – Pune and Kochi, which cost more than $600 million – has taken the Indian Premier League (IPL) valuation to new heights and also reiterated advertisers’ confidence in the property.

However there is also a school of thought that is wary about the rise in ad rates and wonder whether there would come a time when brands won’t be able to afford this Rs 18,000-crore IPL property.

With the addition of these two new teams, IPL Season 4 is expected to see over 90 matches. The worry is how much is too much? Will it reduce viewership or create further clutter? Already, out of the eight IPL franchises, probably only two of them have turned profitable in the last three years, some of these existing franchises expect to turn profitable in the next one or two years.

There is another school of thought that believes that IPL has already reached its peak and it may have to completely revamp itself in the next two years in order to retain its viewership and garner new audience.

exchange4media spoke to media planners to find out their views on whether IPL has reached its peak and whether it will only go down from here on.

According to Rajneesh Chaturvedi, National Director, MEC Access, “I believe the recently added Pune and Kochi teams only signify that IPL is here to stay and that that it reiterates the confidence among the investors. With the increase of two new teams, the number of matches will increase, sponsorship rates will increase and hence, the total advertising revenue is bound to increase.”

On a slightly different take, R Venkata Subramanian, VP, Lintas Media Group, observed, “The bidding for the new teams only reiterates the huge potential and brand value of IPL as a property. However, not many IPL franchises have achieved breakeven, which I think will take at least two years for them to see profits and the new players, on the other hand, will only take more time to get profitable. I believe IPL has already reached its peak and can possibly sustain such ratings for two years at the most. With 90-plus matches, I don’t think it can sustain the pressure year-on-year. Hence, it will have to revamp everything to retain viewership and even get new ones.”

Narendra Kumar Alambara, GM and Office Head of Starcom Worldwide, Chennai, noted, “IPL is still in its third year and expectations are still high, hence we cannot say with certainty that this is how far it can get. Today, we have 10 teams, a few years down the line there might be more teams. The fact, however, is that IPL is still evolving. With two more teams coming in, the number of matches will go up, the opportunity to advertise will also be more, the cost of advertising during IPL will be high and hence, I don’t know how many brands will be able to afford IPL in the long run.”