My friend Subramanyam in the 'comments' section of the previous post has raised a question whether the next stage of Indian Premier League (IPL) will attract more TV audience in view of the current economic situation.
It is logical to think that there will be more TV audience for IPL as people do not have any other entertainment option less expensive in these troubled times.
But there is a flip side. People watch cricket as a sort of relaxation. Thus, a guy who has lost a job or is worried stiff about his savings, is not likely to even think about watching IPL.
Also, most of the companies have an unofficial cut on advertisement expenditure. We have seen the main sponsor of Srilankan Cricket Team, Dilmah Tea, turning its back on Cricket sponsorship. Thus the advertisement revenue, on which the entire IPL model is built, will be adversely affected to the tune of 25-35%. Another major source of revenue for the franchisees is the revenue accrued from Merchandising. This is relatively new concept in India. Under the current grim scenario, it is unlikely that spectators shall aggressively invest in merchandising.
Barring 2 franchisees, no one else broke even last year. They are expected to slip further into red after this years action, which doesnt augur well for the future.
But great product concepts, especially Events, are not built over a couple of years. It takes a while, more likely a decade. IPL thus is here to stay.
After all, Rome was not built in a day!
