After a blistering start in 2008, India's cricketing juggernaut was driven out of the ground this season as viewing figures and brand value fell. But the preceding World Cup showed appetite for the game is still strong, Anuj Chopra, foreign correspondent, reports from Mumbai
In its opening season three years ago, the Indian Premier League captivated cricket aficionados, enticed advertisers and mesmerised marketing gurus who extolled it as one of the world's hottest sporting properties.
But, in its fourth season, which ended yesterday, the Indian Premier League (IPL) opened to its lowest television rating points (TRPs) since its inception. TRPs are an industry measure for a broadcast's popularity based on sample audience figures.
The high-decibel, multibillion-rupee advertising blitz launched at the start of the this year's tournament fizzled out at the end as viewership fell. More troublingly, the brand value of the cricket league - once considered the golden goose of its owners, the Board of Control for Cricket in India (BCCI) - fell 11 per cent this year to US$3.67 billion (Dh13.48bn) from $4.13bn last year, according to a study by the UK consultancy Brand Finance.
Its lacklustre performance this year has sparked fresh concerns about the future of the league, which added two new teams this year.
"The IPL juggernaut has hit a speed-breaker with an erosion of its long-term value," says Unni Krishnan, the managing director of Brand Finance in India. "With rising team costs, the early commercial success of the IPL will be tested. The honeymoon is well and truly over."
Mr Krishnan says the erosion in the IPL's brand value is largely a result of ballooning costs of teams, including players' wages and the money spent on a competitive auction in January to select players.
The average sum each player costs in the IPL over a period of a year stands at $2.5 million, the world's highest per sportsman after the US National Basketball Association league clubs, which spend $2.6m per player.
"If franchisees do not maintain a careful balance between player's wages and organic growth momentum, it can set up a vicious cycle and has direct impact on operating profits and business sustainability," says Mr Krishnan.
Cricket, a national obsession, enjoys a fanatical following in India. TAM Media Research, a television viewership analysis firm in Mumbai, says cricket dominated television ratings last year, with about 176 million viewers or all forms of the game compared with 57 million in 2003. The sport is the biggest driver of revenues for India's TV industry, accounting for 85 per cent of the total TV sports advertising spending.
Last year, 13 billion rupees (Dh1.05bn) - out of a total television ad pie of 105.3bn rupees - was spent on cricket, 20 per cent more than the previous year. This year, with the action-packed World Cup, which was played in India, Sri Lanka and Bangladesh, total Indian ad spending on cricket climbed to 30bn rupees.
But the IPL, unlike the World Cup, is not just a sporting spectacle, it is "cricketainment" - a cross between an enthralling reality show involving glamorous socialites, Bollywood celebrities and business tycoons, and professional sport.
Both tournaments follow different formats of the game. The World Cup had 49 matches, with each team bowling 50 overs. The IPL's 74 matches were 40-over games. Although ESPN Star Sports, the official broadcaster for the World Cup, had a higher number of ad slots for sale, the interest of most advertisers was limited to only those matches that generated the highest television ratings - matches that involved the Indian team. The IPL, which had 10 teams comprising players of mixed nationalities, was expected to generate a consistently high interest among viewers - and advertisers for Set Max, the official broadcaster - throughout the tournament.
But that did not happen.
TAM says ratings fell 22 per cent for the first 26 matches across six metropolitan cities that normally record the highest viewership - Mumbai, Kolkata, Delhi, Bangalore, Chennai and Hyderabad.
For 10 matches played between April 17 and April 23, the drop was sharper - 27 per cent.
The market share for Set Max, which in 2008 bought IPL's broadcasting rights for a period of a decade for $1bn, grew from a pre-IPL level of 5.7 per cent to 28.8 per cent last year - higher than the combined market share of the top nine Hindi general entertainment channels.
It was a preferred advertising vehicle for brands such as L'Oreal - the maker of Maybelline lipstick - specifically targeting women consumers who, research shows, tend to avoid other testosterone-fuelled sporting spectacles such as the World Cup.
But Set Max is feeling the heat from advertisers because of poor IPL viewership figures this season. Some analysts say next season, the broadcaster will not be able to charge the same for ad slots as it did this year.
Set Max's advertising inventory was almost fully sold out before the tournament started, according to Rohit Gupta, the president for network sales at Multi Screen Media, the company that operates Set Max. Ten-second ad spots were sold for 650,000 rupees each were bought by to more than 100 brands including Vodafone, Cadbury, LG Electronics India and Samsung. The limited number of unsold ad spots in the final, nail-biting matches were went for as much as 1.5 million rupees for 10 seconds.
A 10-second ad spot during the World Cup was sold by ESPN Star Sports for an average of 350,000 rupees.
"LG Electronics has, over the last few years, used the IPL to promote its range of 3D television sets and we have received a great response from consumers in terms of sales," says Amitabh Tiwari, the head of sales at LG Electronics India. "The IPL is a great advertising medium, but with declining ratings Set Max will have to rework its advertising rate card."
Mr Gupta insists TRPs are not a fair yardstick to rate the popularity of the IPL because they are calculated from a small sample set. The channel's overall viewership during the tournament, he says, grew this year to 155 million from 143 million last season.
The decline of ratings, which determine advertising interest, is a "matter of concern", he says.
He says the exact reasons for the fall in TRPs is not clear but may be because a number of matches were scheduled in the afternoon, during office hours. Also, he suspects there could be "viewership fatigue" with the IPL following a high-intensity World Cup tournament in which the Indian team emerged victorious.
He says he expects viewer interest in the IPL to climb "to a new peak" next year.