IPL economy: How the tournament boosts consumption

In its 15th year, the Indian Premier League (IPL) became a ‘decacorn’, i.e., its valuation crossed $10 billion, as per a recent D and P Advisory report titled ‘IPL - The Pioneer of Indian Unicorns’. The report mentions that it was the first unicorn from India, and it became one in its first year itself.

In 2008, Sony Entertainment Television purchased IPL’s broadcast rights for 10 years for Rs 8,200 crore. Last year, the Board of Control for Cricket in India (BCCI) sold the 2023-27 IPL media rights for Rs 48,390 crore, with TV rights (Star Sports) accounting for Rs 23,575 crore and digital (Viacom18) fetching Rs 23,758 crore.

Not only is the IPL one of the most profitable sporting leagues in the world, it also impacts the consumption economy. Every year, the IPL, directly and indirectly, impacts other categories around it.

One of IPL’s most obvious impacts, is on the advertising industry. The large viewership drives brands across categories to spend big on the IPL.

According to media reports, in 2023, the total ad spend on sports is expected to touch Rs 10,000 crore across TV channels and digital platforms. The lion’s share, of Rs 6,000 crore, will go to the IPL (including Women’s Premier League or WPL). The IPL ad revenues across TV and digital are expected to grow by 40% over the last season.

Mukund Olety, CCO, VMLY&R, calls the IPL the ‘Super Bowl of India’.

“It’s a whole new festival season for the ad industry. Nowhere else can you have 50 million people glued to the screens at the same time. It’s naturally one of the biggest properties and opportunities for marketers.”

Kapil Arora, co-chairman & CEO, 82.5 Communications, says that the IPL has grown to be the ad industry’s ‘Diwali’.

“Earlier, Diwali used to be one of the biggest contributors to the AdEx. Only a few categories used to look forward to the summer season.”

“However, over the last 13 years, the summer season has evolved. Over the last 7-8 years, there’s been an increase in the number of projects. There are many clients who come in specifically for the IPL season.”

Raghav Bagai, cofounder, Sociowash, says it witnesses 35-40% rise in revenues during the IPL season. "A lot of clients want to be ‘alive’ during the IPL. They want visibility during this period, specially the newly-funded startups who want to attract new audiences."

Many brands also time their product launches with the IPL. For example, Tata Neu was launched during the IPL last year.

But the IPL’s impact extends beyond this. From smart TVs to beverages to food delivery, there’s been a rise in sales in many unrelated sectors during the IPL season.

Lloyd Mathias, an angel investor and business and marketing strategist, mentions that the IPL is now an inescapable part of the calendars of most urban Indians and, therefore, extends to a large part of people’s lifestyle.

“The reach is pretty deep. It occupies prime time slots on TV. It goes on for a prolonged period. Moreover, it isn’t just restricted to cricket, but is more about entertainment.”

Here are some categories that benefit from the IPL:

Food delivery: IPL matches and team victories lead to celebrations at home. As friends gather together to enjoy the matches, food ordering from home, rises. Food delivery apps like Zomato and Swiggy allocate huge spends to advertise during the IPL.

Swiggy has been running the ‘Match Day Mania’ campaign since 2018. In an interview with afaqs! last year, Ashish Lingamneni, head of brand, product marketing and sustainability, Swiggy, said that long-term vision is to create a strong association between the IPL and the brand, just like popcorn and cinema.

Swiggy has brought back the campaign for its sixth edition. For the first time, it’s also offering additional discounts and benefits on the days users are cheering for their favourite team, with the ‘Pick your Team’ campaign.

Fans also like to binge on beverages and snacks, while watching matches. But they don’t want to miss the action, and that’s where quick commerce steps in. During last year’s IPL, q-commerce grocery players recorded a 40-100% surge in sales.

Pubs, cafes and malls: With the IPL keeping people indoors, these businesses witness a decline in footfalls. Many of them offer IPL screenings on large screens to attract their patrons back.

Mathias notes, “Many people get together in public places, like bars or cafes, to watch IPL matches. Some places, like big malls, also provide public viewing opportunities.”

Fantasy sports: According to EY FICCI M&E report 2022, India is the world’s largest fantasy sports market. The IPL season gives it an added boost, as it’s the mainstay of their marketing calendar.

Fantasy sports players are looking forward to this season, as it’s going to be the first IPL since these apps were made available on Google Play Store.

Saroj Panigrahi, senior vice-president, My11Circle, points out that consumer engagement goes up almost 3x during the IPL.

“It offers a fantastic opportunity to actively connect with the millions of cricket fans, who’re looking to engage with rewarding experiences, like those offered by fantasy sports platforms.”

My11Circle witnessed a growth of over 30% on its platform during the IPL season last year. As a growing category, increased visibility and engagement with new users exploring its platform, are as important as retaining the existing users.

TV sets: IPL fans tend to upgrade their TV sets around the onset of the tournament, to improve their viewing experience.

Ritesh Ghosal, chief business officer, Third Rock Solutions and former CMO at Croma, reveals that TV sales witness a 10-15% rise around this time.

“It’s not a big jump, but there’s a little bit of a blip, especially for larger screens, as people tend to upgrade their TV sets.”

Merchandise: Fans love to cheer for their team by wearing its jersey. Many even consider it lucky. The merchandise becomes a means for fans to show their loyalty. However, it is not just the official merchandise partner that benefits from the IPL.

The tournament also drives an informal economy. During the IPL season, street vendors and local shops also stock up on team merchandise. "The official merchandise is a very small segment of the total merchandise," says Paritosh Joshi, an independent media and communication consultant.

However, the IPL season also creates a negative impact on some sectors.

TV viewership: According to a KPMG report, titled ‘Sports Broadcasting on TV’, 97% of households have a single TV set at home. So, during the IPL season, everyone at home tends to watch the matches, leading to a decline in other channels’ viewership.

Mathias adds, “Non-sports genres, especially general entertainment channels (GECs) and news, get negatively impacted. Cricket tends to take centre stage.”

However, Joshi points to the silver lining of this dark cloud. He says tentpole programming like IPL helps to bring back the audience to television.

"Digital delivery of content is going to keep gnawing away at TV. Broadcasters have to deal with the challenge of keeping audiences still locked into linearity," he says.

OTT viewing: People have limited time for entertainment in the day. IPL takes the prime slot in the evening, leaving people with very little time to consume content on OTT platforms. Sociowash's Bagai says clients from the OTT space have sought solutions for this.

Cinema halls and live events: The IPL tends to keep people indoors on weekends. So, all leisure activities, including going to cinema halls and live events, are impacted. Generally, film production houses avoid releasing their films when the tournament is on, and all major films are scheduled before or after the IPL season.

“We’ve noticed in the last 15 years of the IPL that many big production houses don’t release their blockbusters during the IPL, fearing a bad turnout,” Mathias says.