Uday Shankar, the chief executive of News Corporation-owned Asian pay-television broadcaster Star TV, believes that sports broadcaster ESPN will return to India, creating a highly competitive sports television market over the next five to 10 years.
In June, News Corporation announced a deal to buy Disney-owned ESPN’s stake in ESPN Star Sports, which had previously been a 50-50 joint venture between ESPN and Star TV.
“Since ESPN and Star have parted ways, it is only a matter of time that Disney and ESPN will come back to India,” Shankar told the Indian Television news website. “So I think over the next five to 10 years you will see a new round of competitiveness and aggression in the sports market.”
Shankar said that pay-television broadcaster Ten Sports and media company Sony – which launched Six, its new sports and entertainment pay-television channel in the Indian subcontinent in April – would also be active players in the sports market, driving up rights fees.
“Sports had been relatively less competitive in this country because the two big players were together,” he said. “That phenomena is set to change.”
Shankar added that rights fees would also be boosted by the trend of an increasing number of households switching from analogue to digital television, as well as tighter controls on piracy of television signals.
“If the competitive norm stays, then there will definitely be a tendency for the acquisition prices to go up,” he said. “A lot, however, depends on how the distribution market pans out. If the distribution market continues to be so leaky and porous and cable stays largely analogue, then even the current prices will be unsustainable. However, if the digital transformation happens and if there is a matured digital distribution market that comes up, then definitely the prices will go up.”
Shankar added: “If the whole country goes digital, you are talking about 120-130 million cable and satellite homes in the next few years. Even if you say 60 per cent of the entire universe goes cable, you are talking about 70-75 million cable and satellite homes. The eight to nine million paying subscribers for sports currently under analogue cable would go up significantly.”