Thursday, May 10, 2007

Of KBC, cricket, STAR TV and Newscorp

For those who haven’t had the time to read the NewsCorp Earnings for Q3, here are two comments (italicised) pertinent to India:

“STAR’s third quarter operating income decreased from the same period a year ago as 11% revenue growth, primarily from higher advertising revenues, was more than offset by higher programming costs. The increased advertising revenue reflects the broadcast on STAR PLUS of Kaun Banega Crorepati 3, India’s version of Who Wants to Be a Millionaire.”

With KBC 3, the YoY the revenue growth is only 11%? No wonder the income decreases, as, surely, the cost of KBC 3 would have been significantly higher than the average programming costs on STAR Plus. The numbers beg the question – are the big ticket efforts like KBC worth the risk given the explosion of channels and the choices available to viewers?

“Operating results from the Other segment during the third quarter declined by $55 million primarily due to losses associated with the 2007 Cricket World Cup. These losses, which related to the final event under the Company’s programming contract with the International Cricket Council, were due to substantial advertising weakness as viewership declined with the early elimination of popular teams India and Pakistan.”

The poor performance of India (one wonders how much impact the elimination of Pakistan had on TV revenues – I doubt it could be as significant as the Newscorp comment) has affected not only Indian broadcasters but Newscorp as well – and perhaps it’s time to ponder more on the safety of putting money on cricket. Sports such as football, tennis, golf, F1, basketball and so on, are not impacted as significantly if a favourite is knocked out early in a tournament. The audiences (and, subsequently, the advertisers) are not overloaded in a single demographic as is the case with cricket. It will not be enough for the sport if the Indian team starts doing well again – cricket needs audiences in the rest of the cricket playing nations – especially audiences that will excite major advertisers and sponsors from Australia and England.

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