The Indian Premier League (IPL 2020) season is not only important for the BCCI, players, franchises and the broadcasters but also for the fantasy sports industry. With almost 35-40% of industry revenues coming in from the single IPL window of two months, no IPL season means total revenue loss of that pie. Not only this, matches for the Indian cricket team is also on hold since last 4 months and that is adding to the misery of the industry which recently claimed that they have grown from Rs 920 crore in FY19 to Rs 2,400 crore in FY20, which is a three-fold increase.
“Industry has grown, demand is huge but we don’t have content to back it. If IPL 2020 gets cancelled, industry will see more than 40-45% drop in its top line for the full financial year. 1st Quarter has been complete wash out and if India cricket does not resume soon, Q2 will again be a huge struggle for the online fantasy platforms”, admitted one of the fantasy platform owner.
John Loffhagen, Chairman, FIFS, said, “The COVID-19 impacted the Indian OFS industry in FY21 with sports matches across the globe cancelled to ensure player & staff safety. Specific to India, with IPL getting postponed, ~30-40% of the revenues for most of the OFS operators were impacted for the quarter.
Fantasy Platform struggles without IPL 2020 & Indian Cricket
According to the recently released Fantasy Sports (FIFS)- KPMG report, 77% of fantasy sports users are engaged in cricket contests followed by Football at 47% & Kabaddi at 9%. This clearly shows how important IPL 2020 season and India cricket matches are for the industry. Cricket for now is the bread and butter for the industry. Without live international cricket in the last 4 months some of the fantasy sports platforms have tried serving its audience base by creating engagement through nondescript cricket leagues in the territories of Finland, Czech Republic, Switzerland and various others. But the user interest has dropped down to 20-25% of usual levels.
As international cricket has resumed with England vs West Indies series, industry is hoping that Indian cricket also gets back in action as soon as possible. IPL 2020 is the must for all the fantasy platforms to get back in shape.
“These are unprecedented times, but as real-life sports is making a promising return, Indian sports fans are in for a non-stop sporting action for 8-9 months. As most of these matches will be held without an in-stadia audience, we are sure that fantasy sports being a highly immersive fan engagement platform will experience a strong surge in demand by the Indian sports fans.”, added Loffhagen
COVID-19 may result in a temporary blip in the upward trajectory of the fantasy sports segment, the medium to long term growth prospects of the segment remain robust, with the gradual return of international sport. Further, in a post COVID world, with social distancing measures in place, fantasy sports is likely to play an increasingly important role in connecting fans to their favourite sports and increasing fan engagement.”, according to Girish Menon, Head of Media and Entertainment and Partner, KPMG India.
Indian OFS platforms have shown a rapid increase in their user-base YoY, growing from 2 million in 2016 to 90 million in 2019. Similarly, the number of OFS platforms in India has increased from less than 10 operators in 2016 to 140+ operators by the end of 2019. The OFS market recorded a CEA (Contest Entry Amount) of over INR 6,000 crore in FY19 and more than doubled to INR ~16,500 crores in FY20, at a growth rate of 167 per cent over FY20. The growth in FY20 is despite COVID-19’s impact on loss of CEA and revenues for the last 15 days of March 2020.
Key findings from the KPMG survey conducted among 750 respondents
- For 55% of the respondents, their engagement with sports increased once they started engaging with fantasy sports
- 32% of all fantasy sports users, engaged with more than one sport on the platform
- Over 65% of these respondents indicated that there is a direct increase in the time spent in analysing, watching and reading about the sport once they start participating on fantasy sports online
- Fantasy Sports users who engaged with OFS platforms more than 4 times a week spent an average ~215 minutes/week watching sports in comparison to users who engaged less than 4 times a week and spent ~160-180 minutes/week watching sports
- 16% of the OFS users categorically mentioned that the key motive of watching the sportsleagues is to track the performance of their OFS teams
- 77% of fantasy sports users are engaged in cricket contests followed by Football at 47% & Kabaddi at 9%
- ~15-20% of the active users on OFS platforms are paid-users, which is significant given the relatively younger vintage of the industry as compared to other digital businesses