Did STAR’s Cricket Bid Make Sense?

To follow up on my previous post, here’s an excerpt from FirstPost Business praising STAR’s move:

The bedrock of STAR’s bet (and indeed, MSM’s) is the change in the revenue pie for television in India thanks to the TRAI recommendations on digitisation…In such an environment, where the channel has the ability to charge every viewer who wants to access the channel, there is an immediate drop in the pressure to sell advertising. Cricket will, for the foreseeable future, be ‘premium’ content that subscribers will pay for. To illustrate the change, let’s take this: “The number of direct-to-home (DTH) subscribers witnessed a growth of 62 percent in 2010-11,” says research firm ICRA. Currently, for example, on TATA Sky, STAR Sports and ESPN charge Rs 29 per subscriber per month, STAR Cricket Rs. 25. The growth that ICRA reported, 62 percent, are all new revenue targets for  STAR India – and the more digital India gets, the more revenue STAR could target. If subscribers do not pay, they do not watch – as simple as that. In the analog system, a subscriber might have paid – and STAR might have received nothing from him, with the cable operator pocketing the subscription. In the digital regime, this is impossible.

I hadn’t even thought about cable subscription fees (rather naively, in retrospect). If equality is your overriding concern, you should be worried by this model, since it essentially carves up India’s cricket fan base into those who can afford to pay for cable, and those who can’t. [The English Cricket Board has been dealing with this debate for years; see this article for an insightful summary of both sides.] Then again, I wonder what percentage of India’s cricket fans follow the game through the television — for all our talk about this medium changing the game, perhaps more still follow through radio/print/mobile sources, rather than shell out the monthly fee?

 

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