THE tug of war between ESPN and Maharashtra's cable operators is turning out to be a game the sporting channel is not accustomed to. The problem erupted when ESPN turned into an encrypted channel on May 15 and demanded monthly payment based on the number of subscribers, instead of the flat fee charged by pay channels like STAR Movies and Zee Cinema. Now, while it learns the rules the hard way, those caught in between—the cricket-crazed viewers and, more crucially, the advertisers—are feeling the pinch.
Corporate giants know by the time a ceasefire is called, the Texaco trophy will be history. The India-England one-day series is already over, and Maharashtra's viewers missed the matches. Now, the possibility of their having to forego the Tests looms large.
"Some of our commercials are at an important juncture and there's little we can do about it," rues Jimmy Mogal, senior manager, external affairs and corporate communications, Coca-Cola. The loss for Coke and other ad giants has not been so much in terms of revenue and reach as much as their pride. "We haven't put all our eggs in one basket but we can't pull out because ESPN has the exclusive rights," Mogal adds.
ESPN has been claiming a reach across 200 cities but with Bombay out of the reckoning, advertisers feel only a small percentage of viewers would qualify as target audience. Cable TV distribution operators like Zee TV's Cable—which claims 22 lakh connections across India—has rejected ESPN's terms, depriving 80 per cent of their viewers.
"People want to make sure their investment is well spent. So do we," says Chris McDonald, director, marketing and advertising sales, ESPN, who has come down from Hong Kong to deal with the crisis. "We've been getting calls from advertisers but it's up to them whether or not they want to talk things out. They're sure of getting exposure through ESPN. Sure, they would be comfortable if they were seen more viably in Bombay, but it's not a panic situation. We intend being in India for a long time."
He also defends the new pricing structure. And while he agrees the impasse had hit ESPN in Bombay and Bangalore, he says thesituation in Delhi and Calcutta is promising. But cable operators in Delhi, who swung a deal with ESPN and telecast the matches, are inserting local ads over the ESPN promos. "Well, we paid over Rs 25,000 for the decoder. This is the only way to ensure we get it back," shrugs an operator.
A media director says ESPN should not have introduced new rates now. "The industry is in a nascent stage and advertisers have always had a herd mentality. Right now, they're waiting and watching," he adds. ESPN is confident of winning in the long run and doesn't want to buckle under pressure. The logic: it has paid through its nose for exclusive rights and is not going to let advertisers influence its agenda. "ESPN does not mind losing a few advertisers. It knows its programming will win. And advertisers know this," says an ESPN media executive.
There are those who agree. Says Anand Rego, associate media director, Initiative Media: "We're recommending it to clients. ESPN has premium programming and that's what viewers want. If DD and Prime Sports can't give them what ESPN can, pressure will build up from the viewers."
Trouble is, till then, the advertisers will be spending huge sums for spots which may or may not reach viewers. The rates vary from $150 to $650 for a 30-second spot. The India-England series is in the same super premium category as the French Open finals and top soccer tournaments and a 30-second spot costs $650. "If the advertisers are promised a one-lakh viewership and the reach is not even 50,000, they will ask for refunds," says Leena Sharma, general manager, Siti Cable.
A stretched out stalemate may see advertisers pruning their patience and cutting costs. "The revenue generated from cable operators is insignificant compared to ad-revenue," says Mogal. "The matter should have been sorted out sooner. Even the finalisation of the World Cup telecast was unsure. It's very frustrating for advertisers."
Hanging in the balance is much moolah and the patience of fans, enthusiastic despite the flop show by Azhar's shivering boys. If they and their hopeful advertisers miss the Test series, there will be more losers back home than the pack who went abroad.
