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Media Convergence: Advantages and Disadvantages

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Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.

Published: Wed, 07 Mar 2018

Introduction

The electronic highway of information that is girdling the world has brought an end to the Gutenberg era. Transition from a “stones throw away” world to a “click away” world has changed the way we live, interact, socialize and work. It has also changed the way we perceive culture, people, processes, objects i.e. life in short. The high speed network fabric has rendered geographical boundaries irrelevant.

A few years back it may have sounded like an idea by Slartibartfast from the legendary planet of Margarathea(from the Hitchhikers Guide to the Galaxy) but with the advent of technological platforms this ain’t a far-fetched idea any longer but is the reality of the present times.

It all began with the technological outburst which led to the availability of various platforms that helped to efficiently maximize the transfer of information. The degree of separation between the company and the consumer has reduced considerably.

Branding Redefined

Branding is no longer the privilege of the larger conglomerates or the big pockets. With the advent of technology and the significant reduction in the costs associated with branding, smaller companies that are taking branding seriously have cropped up like mushrooms. The competition is much tougher and there is this race of owning properties both online and real to cut out the competition. In the context of sports we can take the example of the Indian Premier League (IPL) the largest sport event in India this year. So there would be sponsors for IPL who would demand exclusivity. This is applicable across industry sectors- say a sponsor of something like MTV Roadies who would end up owning the content rights of the show- just to kick competition out of the advertising sphere for the show.

The questions that loom large are “Has the traditional media died?” or “Has it just reduced to a mere supporting media?” or “Have the rules of the game changed?” or “Is it a new game altogether?”

Brand experience is both emotional and functional. It is not only a promise that a company makes, or an assurance to the quality of the product as mentioned by Aaker(1991) but it also has a psychological role to play. They make you feel good about yourself or are an expression of yourself. They also fulfil social needs like a sense of affiliation or belongingness to a community or a group of people who think alike.

The very fact that names like Arsenal, Manchester United of the English Premier League (EPL) are household names in a country like India where nothing but Cricket sell’s, shows the growth of sports branding. This phenomenon has been more evident in the recent past all because of the media convergence (Kerr,2008). There are fan communities where people can discuss their teams, interact with people with similar sentiments, vent their anger when a player does not perform and share their grief when their team loses. The arrival of sport channels has provided a medium to the broadcasters to telecast all kinds of sports and not just cricket. There is as much of motor sports, basketball, tennis and football as there is cricket.

The question that pops up next is, what is the brand? Is it the player, the club or is it Football the game itself? If yes, how has a little white ball and a green field inspired the most successful brand principles that has led to true brand management?

The concept of a sport being a brand may sound a little ridiculous at first, but the figures don’t lie. A Brand Finance survey conducted in 2005 revealed that Manchester United had a brand value of £197m, Liverpool a value of 156m, Chelsea £137m and Arsenal a brand value of £115mn.

Indian Premier League (IPL) – The Sport Renaissance in India

India has two primary religions – Bollywood and Cricket. The only differentiating factor that sets sports entertainment apart from the rest is the passion that it commands and the real time execution. The cricket economy world over is 1bn USD to which India contributes to more than 60%. This includes revenues from ticket sales, sponsorship, endorsements and broadcasting rights.

In 2008 the remote wars in the households in India had struck a truce as all the members in the family were glued onto one thing -the IPL for their own different reasons. Be it the glamour, be it the sport, be it the uniqueness of the concept or be it the hype around the event, IPL redefined entertainment. The General Entertainment Channels (GECs) observed a huge dip in the Television Rating Points. Nothing had grabbed the attention of the masses & the classes at such a scale ever before.

Next year IPL struck again-grander and better. The GECs delayed the launch of new shows as they were sure they had nothing that could compete against the IPL. Such is the potential for the Sport Industry in India.

The IPL ’09 had rung the death knell of the whole arena of player management in India as small size sponsors signed the best of the players in the Indian team for a year at dead cheap prices. This fiasco happened due to the deals that the IPL Franchise had with these sponsors and the players were bound by it. This was the reason why we saw Master Blaster Sachin, Zaheer and Harbhajan promoting Luminous Invertors and Sehwaag advertising for Jetkings an equipment hardware manufacturer. Is it truly about club over country?

The club format brought to the public light through the IPL has shattered the myth that sports in India is about national identity and patriotism? In the auction the highest bid jersey was not that of Tendulkar or Ganguly, it was Khan’s 11.

It has given rise to a lot of questions – What is it that makes a person support the Mumbai Indians or the Kolkatta Knight Riders? Is it Sachin, Sehwag, Shilpa or Shahrukh? Is it the success of the team or the strategy that they employ when at the field? The other areas of concern would be has this concept of IPL revolutionized the way sport is consumed in India? Will the spectators be interested in an IPL match over India vs Pakistan Test Match?

The Moment of Truth in the IPL that made it’s success eminent was the fact that the crowd actually cheered when Sachin was bowled by Bret Lee. This is an indicator of the fact that sports in India is in the throes of evolution. People are open to accepting it as an entertainment option than a patriotic struggle. Literature Review

What is Media Convergence?

  • Britannica Encyclopaedia say’s, “Media Convergence is a phenomenon that involves the interlocking of computing and information technology companies, telecommunication networks and content providers from the various media platforms like magazines, newspapers, radio, television, films and the likes. It also says that Media Convergence is the confluence of the 3 C’s – Communication, Content and Computing”.
  • According to Henry Jenkins who is a highly respected media analyst and one of the foremost leading experts on the convergence culture paradigm, as well as, the DeFlorz Professor of Humanities and the Founder and Director of the Comparative Media Studies Program at MIT states that, “the flow of content across multiple media platforms, the cooperation between multiple media industries, and the migratory behaviour of media audiences is what constitutes media convergence”. It is not just the confluence of the traditional and the new digital media but it is also about the unpredictable ways of interaction and association of the consumers and producers of media. It is not solely technological but there is a huge gamut of socio- cultural paradigm shifts that have changed the way the consumer evaluates a product, makes his decision and his social interactions to seek information. It also includes the experience that the producer of the media makes the consumer go through (Viau, 2001).

The world is witnessing the new forms of media in which they have a larger control over the types of feeds they receive, the ease with which they can interact with not just the media but with the media provider as well. This has brought a whole new dimension of competition to the traditional media platforms. This has also led to a lack of dependence of the consumers on any particular media which in turn translates to lesser loyalty.

Benefits of Media Convergence:

  • The content creators can use the platform to generate customized content that is targeted at a specific group.
  • This has also brought about a change in the dynamics of economy as distribution and cost structure is not the same in traditional media.
  • It has brought about a sense of Post Modernism to the field of media consumption where the consumer is not an audience but is also a co creator.
  • This has also brought about a change in the experience that a person goes through by consuming media. It has transcended the limitations of the traditional media.

Negatives of Media Convergence:

  • This has brought in a certain amount of unpredictability in the responses that a media would receive. With the audience being exposed to a plethora of media platforms it gets tough to understand what has had what kind of effect on the consumer.
  • Media Convergence has brought about a shift in the control that the content creator had over it’s property. With the advent of blogs, mobiles and emails the consumers are exposed to large amount of unbranded content. This has led to an increase in the competition for consumer’s time and attention that the content creators face.

Is Sport an Industry?

Does industry necessarily comprise of a product or service? NO! It could be an offering that is neither of the two but is consumed by the people. Entertainment is an industry and so is religion. Thus Sport is an industry too which comprises of selling sports or selling through sports. Be it the events, leagues and the tickets to view these or the marketing of products through sports- which would include merchandize, licensing and sponsorship (Mason, 1999).

The figure below represents a model of the Sport Industry

Parallels can be drawn between Sports and a Consumer Product. Below is a representation of the value chain of the sports industry.

Sport as a product can be consumed in different ways- playing, watching, reading or being entertained by it. The level of involvement of the consumers -fans in the sports jargon, differs for each of the way.

“Football is a million dollar industry. The sport has a long heritage in UK and has the most prestigious premiership in the world and has attracted players from all four corners of the globe. Most importantly, football inspires passion and the ‘big four’, Chelsea Arsenal, Manchester United and Liverpool FC, are among the most valuable brands in the country”, says Ruth Mortimer- a sports marketing blog owner.

What is a Sports Brand?

What constitutes a sports brand is questionable. It depends on what the product is? Is the league a product or is it the clubs in the league that constitute the product (Goldman, 1989; Grauer, 1983; 1989; Gray, 1987)? It is argued that the league can be taken as a cartel of these entities i.e. the clubs. This would determine the marketing strategies for the league and the clubs. But whatever the case be both are brands in themselves.

If football is the category EPL can be taken as the Umbrella Brand and the clubs like Manchester United, Chelsea and the likes would constitute the sub brands. Even the players would be brands in their own respect. If Beckham is the brand then it is dedicated, suave and down to earth (Milligan, 2004). Manchester United stands for excitement and great entertainment all so because right from Cantona to Giggs to Rooney and Ronaldo, the club has stalwarts who are both excellent at the game and are trend setters in their own way. Hence there is a clearly identifiable brand proposition (Baeur et al, 2005).

How are sport brands different from the product brands?

NBA Franchise was the first to realize the potential of brand building and what organized marketing can do to fuel revenue generation. Andy Mulligan(2009), says, “ Brands are often, somewhat lazily by some people, equated with pure commercialism and worse still with a kind of ‘fluffy’ marketing that is about ‘spin’ and not substance.” He is of the view that though Sport is a huge industry, managing teams is not in the least similar to managing a business. The very premise that a business is a tradable property sets it apart. A team is a repository of emotional associations that fans world over share and build. Hence sports team is not a business but it could definitely be a brand as it’s an identity and a promise that the consumer’s believe in and an experience that they live.

The association of a spectator with a specific club is enhanced by the collaborative play of “local, national or emotional identifications” (Whannel, 1992, p. 199) or by the un-certainty of the outcome of the game (Clapson, 1992).The degree of association of the club and the spectator is so high that he develops a strong sense of affiliation with the club. He feels proud and celebrates the victories and is all gloomy over the losses. This phenomenon has been termed as Basking in Reflected Glory (BIRG) (Cialdini et al., 1976).

Media and Sports

The globalization, the opening up of trade barriers, this era of media convergence, the popularity of the internet, and the ever increasing number of netizens has revolutionized the sports industry. The advancements in communication technology provide omniscient access to all kinds of leagues that a team plays in. This coupled with the 24X7 dedicated sport channels has opened up a whole new arena of entertainment.

Today the English Premier League and Formula 1 are as popular in the Asia Pacific as they are in Europe. Earlier people used to watch just the league finals but now they have the option to follow their favourite teams irrespective of their geographic location and time. The qualifiers for the Champions League or the NASCAR have a sizeable number of viewers as does the grand finale.

  • When Real Madrid signed the superstar David Beckham, the live telecast of the ceremony attracted more than 2 million eyeballs (Hatfield, 2003).
  • Games of Houston Rockets had a viewership of over 30 million Chinese viewers who tuned in just to watch Yao Ming- their fellow citizen battle the National Basketball Association’s (NBA) finest (Larmer, 2005).
  • Manchester United has a huge fan base of close to 24 million in China alone which is more than the number of viewers in Britain. More than half a billion people tune in to watch the weekly games world over. (Datson, 2004).

The popularity that these sports command has attracted the attention of sponsors and advertisers. The teams themselves have realized the large potential that the world of marketing has in store. They have capitalized on this opportunity and the audience sentiment by branding themselves. They have a prominent presence across the various levels, be it Below the Line or Above the Line. We have Team Anthems, Jerseys, Videos, Events, Parties, Posters- ALL OF IT!

  • Manchester United’s branded licensed jerseys sell more in the USA as compared to all the other Major League Soccer (MLS) clubs combined. The number of hardcore fans has been approximated to a good 4 million in North America alone.
  • Japanese tour groups spent US$500 million on just the tickets and souvenirs from the New York Yankees’. All so to watch Hideki Matsui the outfielder from Japan. This was more than five times what the presence of Ichiro Suzuki in Seattle Mariners generated (Whiting, 2003).
  • Internet statistics tell the same story. There are more ‘satellite fans’ to the NBA. 40% of visitors to the website log on from outside the States and a humongous 20% of the licensed merchandise is sold overseas (Eisenberg et al., 2003).

Global Sports Industry & Recession

When the whole world is in the throes of recession, sports is one industry sector that has not been as badly affected as the others and was quick enough to bounce back within a year. Loss of sponsorship, events being cancelled, biggies withdrawing from the arena; these are some of the development the sports industry has witnessed in the recent past. On one hand we have been witnessing things like

  • Honda, Kawasaki and Subaru withdrawn from motorsport
  • Manchester United lose £56 million AIG shirt sponsorship
  • US National Football League indicates it will cut workforce by 10%
  • Tiger Woods loses five year $8 million endorsement contract with Buick
  • Vancouver 2010 Olympic Games takes out additional $800 million loan to cover financial shortfall
  • 2009 Indian Masters golf tournament cancelled
  • Arena Football League in US cancelled for the season

On the other hand the world witnessed the largest ever viewership and increasing advertising

spend

  • TV viewership increased to 1 million (97.4m to 98.4m); advertising investment up $20 million (from $186 million to $206 million) at the Super bowl 2009

Manchester City sold for £200million+ in summer 2008

  • Premier League signs new live TV rights deal for £1.78 billion, surpassing previous deal
  • Badminton England signs record-breaking sponsorship deal with Yonex
  • Manchester United and City will both sign lucrative, record-breaking shirt sponsorship deals if the rumors are to be believed

Sports Scenario in India

The Sports arena in India has been dominated by cricket for quite some time now. But with the converging media and the Westernization sports like soccer, basketball, motor racing have observed an increasing fan base.

A look at the Audience and Viewership data from TAM is enough to prove this point. Cricket is followed by soccer, tennis and wrestling. The reason for the monopoly of cricket is simple.

Cricket is the only sport where India has made a mark in the International arena and which still holds hope for Indians to win over others. This has provided it the status of religion in India.

The other popular sports would include Soccer, Tennis and Motor Sports as revealed by a TAM report. This marks the herald of a whole new era of sports entertainment and marketing. Below is an overview of the size of the sports industry in India

IPL- The Story so Far

India has two religions Bollywood and Cricket and the whole country was awestruck when the two joined hands. IPL is all about glamour, excitement and passion.

It works on a franchise model where each of team is owned by an industrialist, a celebrity or is a joint venture. There was an auction to own the clubs and then there was an auction to make the team and select the players. This was the golden time for the Cricket Board in India as it made a lot of profits. Franchise rights were tendered with a reserve price of USD 50mn for 10 yrs. The owners get a percentage of the revenue that the team earns and has other streams like merchandising to mint money from too.

The primary difference between the IPL and the English Premier League was the fact that in IPL there was a cap on the amount of money that could be spent in building a team. Unlike EPL where the teams that are backed by the deeper pockets manage to buy the best of the players and end up winning the tournaments and the others are a t a competitive disadvantage.

Apart from this sponsorship on Television and the ground constitutes a huge chunk of the revenues that the board and the team earn. The IPL website had 50mn page views in the first week and had received 530,000 column cm of stuff written about it in the newspapers in the Season 1.

The opening match in Delhi had a Television Rating Point(TRP) of 7.19 which was the highest for any event in India ever. It had a TRP of 6.7 amongst women which is a considerable number considering the fact that Indian women are generally not much into watching sports.

Thus we see that it ain’t just a mere entertainment option but is an industry in itself.

The Need Gap

The clubs are no longer just teams whose players lend it its brand value. There is a huge industry of sports merchandize, events and the likes that thrives on this – it’s a culture in itself. Keeping this in mind I plan to study formats like the EPL and NBA which are brands in themselves and arrive at the factors that lead to the success of such brands.

India as a nation provides huge potential to market these brands. It is not just the passion for the sport or the sentiment of belongingness to a particular nation that commands loyalty. There are several other factors that have converted sports clubs or teams into one of the most valued brands world over. Therefore there is a knowledge gap that exists. It is to study what these factors are and what are the things that affect these factors?

Parallels can be drawn between the sports industry in India and in nations abroad which in turn would help marketing sports, teams and clubs as brands in a nation like India- which is a burgeoning economy and holds great prospects for such brands.

Research Objectives

  1. To understand how sports branding has grown as an industry in the West, taking EPL, NBA, Formula 1 as a case study.
  2. To understand the consumer perception of sports as a brand in India by conducting a research amongst the audiences
  3. To understand how media convergence has led to the popularity and the cult like fan following of Western sports in India
  4. To analyze the Indian sports industry and devise a marketing strategy for building a sports brand in the Indian context

Research Methodology

Research Design

A fan “represents an association from which the individual derives considerable emotional and value significance” (Madrigal, 1995, pp. 209-210). Thus it is not equivalent to being a spectator. Therefore to understand their behaviour and attitude statistical data about what they watch and how often do they watch does not help in the quest to understand what makes them a fan.

Therefore the research methodology would be a mix of quantitative and qualitative as both have their own advantages and contributions to making this study more fruitful.

Quantitative studies use the deductive logic to explain social facts (Horna, 1994, p. 121) and thus would help in understanding the behavioural component. This would help in understanding what the crowd constitutes of and what are the primary scalable attitudes exhibited by them. But this fails to explain the underlying reasons for such behaviour, things that differentiate a fan from a spectator. Thus, qualitative study becomes important too.

Qualitative methods help in exploring the cognitive components. It also helps explaining the longitudinal behaviour of things rather than a mere snapshot of the present scenario which could be gauged from the quantitative.

In depth interviews would be the preferred technique as we seek to understand the reasons why an individual behaves the way he does and not really the collective opinion of a group.

The quantitative research can be carried out by administering a questionnaire online and in person. Some statistics can also be gathered from the various databases and research data available publicly.

Sampling

The research aims to understand how the emergence of media affected the attitude of the people towards Sports in general and the club culture in particular. It is conducted to understand what is it that makes them commit their loyalties to a particular team and how does this affect the economics of the industry.

Only SEC A and B are considered based on the assumption that the SEC’s lower than this don’t contribute much. Females have been considered as recent researches show that there are an increasing number of women who have started following sports and participating in it. Hence their opinion and perception could be a valuable contribution.

Expected Contribution

After studying the responses from the sample, the research would help arrive at answers to various questions regarding the future of the sports industry in India. Questions like where is the industry headed? What kind of sport would sell? How do the sports brands communicate to the people? How has the convergence of media affected their understanding of the sports industry?

Apart from this it would help brand managers and sports consultants to design the branding strategies for the various sports brands so that they can sustain themselves in this highly competitive and unpredictable market.

Secondary Research: Marketing of Professional Sports

Professional sports started with the leagues specializing in one kind of sport which would run for a season and the league enjoyed a monopoly in the arena. But with the advent of infrastructural facilities and increased investments in the industry of sport management there are multiple leagues fighting for the share of eye and heart. They fight for consumers who have a plethora of other entertainment options to select from. Thus the competition in not limited to just the sports industry but is with the larger entertainment industry (Grauer, 1989).

The one thing that makes professional sports appealing to the audiences is the uncertainty of the results. The adrenaline rush that the spectator experiences with every passing minute is dramatic and cannot be derived from staged content.

“Like other forms of entertainment, sport offers a utopia, a world where everything is simple, dramatic and exciting, and euphoria is always a possibility … Sport entertains, but can also frustrate, annoy and depress. But it is this very uncertainty that gives its unpredictable joys their characteristic intensity (Whannel,1992, p. 199)”.

The intensity of appeal and engagement with the sport is further enhanced by the association that an individual has with the sport and if there are stakes that he has in the outcome. The concept of Basking in Reflected Glory(BRIG) talks about the highest degree of association where a fan is a loyal even if the team does not perform well(Cialdini, 1976).

Initially the sports leagues were owned by individuals or entrepreneurs but with the growing popularity it has achieved the status of an industry and has been successful in attracting corporate and has taken a more formal structure than a mere source of entertainment. It is due to the involvement of these corporations outside the realm of professional sports management that has brought in newer revenue streams like merchandizing and sponsorships. This model of corporate ownership of a league or a club was started in the USA and was later adopted by the leagues in the continents of Europe and Australia. The biggest advantage of this is that the teams are backed by deep pockets and investment into a team is a part of the investment portfolio of the corporation and not the main business area. Companies like Blockbuster, Disney and Turner from the North American industry of entertainment and broadcasting have benefitted from their presence in professional sports (Cousens and Slack, 1996). This has also helped Rupert Murdoch to extend his empire across the globe. This has also helped in attracting better players as the salaries are far better, improved facilities to train and huge advertising expenditures to build the fan base.

The corporations are not buying into the uncertainty of the game by owning a team but are using the reputation of the team to fuel their interests. For example the treaty between FOX network and the National Football League was not really a profitable venture for the broadcast network as it had to overbid to acquire the rights but as Murdoch puts it, “it has made [FOX] a real network in the US”(Swift, 1995).

Globalization of the Leagues

“Professional sports leagues are now a part of the powerful recreation and entertainment sector of the economy. In addition, sports have “delocalised”; the global marketplace has made sports less attached to specific places, particularly those which have world-wide appeal, such as football and basketball (Euchner, 1993)”. Satellite TV and Internet has sped up the delocalization of professional sports by making the content available across the globe in real time.

The total income of the “Big 5” football leagues in Europe in the year 2005-06 was £12.6 billion ($18.54 billion) (Deloitte and Touche 2007), out of which the Barclay’s English Premier League(EPL) was the largest contributor, generating revenues as high as € 2 billion.

The most sought after customers of the industry would be the fans as they are loyal and facilitate generating the revenues required to rope in the best players and management. The media analysts refer the players, the clubs and the leagues as the “brand” (Globalisation of the league, Dr. Bridgewater, 2007). The brands in this industry are not same as the rest but there are strategies that remain the same. When a FMCG brand has to be made global, what companies generally do is start operations in the country where they would like to have a presence. Similarly, the leagues involve other nations or players that have a different nationality to increase the audience base which in turn would lead to building up the fan base which constitutes the target segment for the merchandise.

For example the National Football League (NFL) in the USA announced the first competitive game between the Miami Dolphins and the New York Giants in October 2007, more than a 50,000 tickets were sold within 3 days of the announcement. The buyers comprised of local and expatriate fans. This is representative of the fact that there is huge potential in this industry sector.

The number of “E Loyals”- people who don’t hold a season ticket or have been to watch a live match but support the game and the club as they have been exposed to it online or on TV- has been rising in the last few years. They are a segment that is as likely to buy the merchandise as a fan who is a regular at the stadium. Pennants, caps, shirts, flags, bands and other team branded articles are what have led to an increase in the revenues and facilitated penetration in other geographic markets (Cousens and Slack, 1996).

English Premier League (EPL) -A Case Study

English Premier League is a leading association of professional football clubs in the European Union. It has 20 clubs that play in the league every year and follows the system of relegation. Each of these clubs is a shareholder to the league. The EPL came into existence in 1992 when the First Division in the Football League decided to part ways from the Football League as it had struck a lucrative deal for television broadcast rights. It has the largest revenues in the football arena, close to a $4mn in 2007-08. It is perceived to be more glamorous, entertaining and action centred as compared to the rest of the European Leagues like the Serie A and La Liga in Spain. Premier League has undoubtedly grown to be a global brand.

The global fan base of the leading international football brands such as Real Madrid and Manchester United runs in millions of British Pounds and “shows no sign of waning” (Deloitte “Football Money League”,2008)

What is it that determines a person’s identification with a club?

A Research conducted in 2002 has identified 5 important factors that govern the association of fans with the team. These are primarily

  • the support that the team gathers at the venue
  • the management of the team
  • the traditions, values, legacy that it entails
  • the social entertainment factor i.e. the fan community that it h

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