By Karan Taurani@Elara Capital

– As per media reports , Star Sports won’t be a part of the base packs for major MSO’s like Den, Hathway and GTPL that have almost 20-25mn subs

– This implies that customers will have to either subscribe to star sports on ala carte basis or pay 15-20% higher ARPU as it’s a part of the other premium package above base pack

– As per our assessment, post NTO implementation, only 8 percent of the customers moved to ala carte as Indian consumers remain value centric ; 92 percent of the consumers still consume bouquet based offering

– We don’t foresee any big negative impact of the above for Star as TV is a preferred medium for sports viewing, as this is one genre which has stood out vs others which have reported a decline (especially Hindi GEC and movies) in the post covid era.

– Further, smart tv numbers and broadband penetration are too low (15-16 percent of the total universe) to have a sizeable negative impact of customers transitioning to OTT and now viewing IPL on TV; sports on TV can be a potential threat only if these numbers scale up over the medium to longer term and helped by value add offerings by digital (4K and interactivity), which TV cannot offer

– In terms of implication of above , we believe a larger chunk of these affected households will pay 15-20 percent higher ARPU to have star sports in their package, as IPL is consumed in large groups on a big screen, without any potential interruptions due to data speeds; time spent and consumption of IPL on digital will grow faster as compared to TV on a smaller base, however the overall time spent may be lower, as consumers may watch IPL on digital only basis convenience viewing on mobile phones; digital medium is more favourable for personal viewing of content

– There may also be a very minuscule portion of these 20 mn customers – in our assessment , not more than 15-20% of them who may migrate to only digital due to higher pricing on TV, in a worst case scenario; this in turn may negatively impact IPL on TV reach by 3-4 percent (total base of 500mn +, inclusive of play off matches in FTA)

– However, negative impact of above will be more than offset by positive impact higher subscription revenue by customers, which in turn will lead to higher subscription revenues for Star and IPL, at a time when ad revenues seem to be under pressure due to new age companies cutting ad spends

– We thereby believe that the above is a neutral impact in a worst case for Star and could potentially be a positive impact with customers moving to the higher pack or pure ala carte due to exclusion from base packs

(The views expressed are those of the author and Indianbroadcasting.world.com takes no responsibility for the same.)