The arrival of Rupert Murdoch (pictured) in town is routinely accompanied by fevered speculation about the media magnate’s latest plans and activities. His trip to Asia last month was no exception.
The headline writers’ task was made easier with the announcement of a US$100 million investment in a slate of regional-language Indian channels. The actual figure is expected to be nearer to US$60 million, but, having previously dedicated much time and resource to acquiring the US business paper The Wall Street Journal, the message was clear: Murdoch is focused on reinvigorating Star.
India is unmistakably the growth engine of Star and getting the strategy right there is key to the wider success of the company. In the wake of his trip, speculation linked News Corp to Kerala news channel Asianet and Sakaal Group’s Marathi-language news channel Saam TV, among others.
It seems likely that the protracted WSJ deal - along with activity at other outreaches of the Murdoch empire - meant Star was not top of its list of priorities. After a remarkable period of success, Star has endured some tough times.
Increased competition from Zee and Sony, along with a highly-publicised management shake out, resulted in lengthy delays for Star’s new ventures. Privately, one senior ex-Star executive asks why it has taken so long to get the regional channels blueprint in place given that the plans were being talked about before CEO Peter Mukerjea left the company in 2006.
Asked about Star, Murdoch’s long-time chief lieutenant and News Corp president and COO Peter Chernin admits the channel should have been more active in Southeast Asia and is unequivocal in saying that it will do more in the region, with a particular emphasis on aggressive expansion in India.
Murdoch’s son, James, currently chairman and chief executive of News Corp Europe and Asia, will have a crucial role in deciding how the Star strategy is executed. The contrasting outlooks for the two regions’ advertising markets will be abundantly clear to the ex-BSkyB boss. And James is no stranger to the Asian market, having been in charge of Star from 2000 to 2003.
Star makes money from affiliate fees, but advertising is the big earner, which bodes well given the trajectory of the Indian market. Regional TV advertising was worth an estimated US$460 million last year in India. But the booming ad market and increasing number of television channels trying to get hold of those ad dollars provides new challenges. The cost of making programmes has rocketed, which has offset the advertising revenue gains for Star.
A shortage of skilled technical staff, studio space and on-screen talent presents all broadcasters with a real problem that is unlikely to resolve itself any time soon. Costs at Star Plus and Star World impacted quarterly results, with operating income of $90 million flat year-on-year despite a 20 per cent uptick in ad revenues, according to analysts’ estimates.
In Star India’s programming department the expectation is that it will take a couple of years before supply of programming catches up with demand and costs level out. In the past year it has started tying programme makers into long-term deals to mitigate the rising costs. Management is also quick to note that Star has a reputation with producers as a prompt paymaster.
News Corp would also like to have its publishing empire established in India. It seems unlikely that Murdoch senior would have neglected to broach the subject of the 26 per cent foreign investment cap in place when meeting with Indian Prime Minister Dr Manmohan Singh during his recent trip.
Indian success assumes even more importance for News Corp given its mixed results in China, despite Murdoch’s repeated attempts to court that country’s leaders. Star might appear a small cog in a News Corp machine, which had turnover a fraction under $33 billion in 2008, but recent developments have made it clear that the company is paying close attention to Asia, and India in particular.
Unfortunately for News Corp, many others have come to the party in Asia, which makes what happens next in the region so fascinating for Murdoch-watchers.
Got a view?
Email [email protected]
The headline writers’ task was made easier with the announcement of a US$100 million investment in a slate of regional-language Indian channels. The actual figure is expected to be nearer to US$60 million, but, having previously dedicated much time and resource to acquiring the US business paper The Wall Street Journal, the message was clear: Murdoch is focused on reinvigorating Star.
India is unmistakably the growth engine of Star and getting the strategy right there is key to the wider success of the company. In the wake of his trip, speculation linked News Corp to Kerala news channel Asianet and Sakaal Group’s Marathi-language news channel Saam TV, among others.
It seems likely that the protracted WSJ deal - along with activity at other outreaches of the Murdoch empire - meant Star was not top of its list of priorities. After a remarkable period of success, Star has endured some tough times.
Increased competition from Zee and Sony, along with a highly-publicised management shake out, resulted in lengthy delays for Star’s new ventures. Privately, one senior ex-Star executive asks why it has taken so long to get the regional channels blueprint in place given that the plans were being talked about before CEO Peter Mukerjea left the company in 2006.
Asked about Star, Murdoch’s long-time chief lieutenant and News Corp president and COO Peter Chernin admits the channel should have been more active in Southeast Asia and is unequivocal in saying that it will do more in the region, with a particular emphasis on aggressive expansion in India.
Murdoch’s son, James, currently chairman and chief executive of News Corp Europe and Asia, will have a crucial role in deciding how the Star strategy is executed. The contrasting outlooks for the two regions’ advertising markets will be abundantly clear to the ex-BSkyB boss. And James is no stranger to the Asian market, having been in charge of Star from 2000 to 2003.
Star makes money from affiliate fees, but advertising is the big earner, which bodes well given the trajectory of the Indian market. Regional TV advertising was worth an estimated US$460 million last year in India. But the booming ad market and increasing number of television channels trying to get hold of those ad dollars provides new challenges. The cost of making programmes has rocketed, which has offset the advertising revenue gains for Star.
A shortage of skilled technical staff, studio space and on-screen talent presents all broadcasters with a real problem that is unlikely to resolve itself any time soon. Costs at Star Plus and Star World impacted quarterly results, with operating income of $90 million flat year-on-year despite a 20 per cent uptick in ad revenues, according to analysts’ estimates.
In Star India’s programming department the expectation is that it will take a couple of years before supply of programming catches up with demand and costs level out. In the past year it has started tying programme makers into long-term deals to mitigate the rising costs. Management is also quick to note that Star has a reputation with producers as a prompt paymaster.
News Corp would also like to have its publishing empire established in India. It seems unlikely that Murdoch senior would have neglected to broach the subject of the 26 per cent foreign investment cap in place when meeting with Indian Prime Minister Dr Manmohan Singh during his recent trip.
Indian success assumes even more importance for News Corp given its mixed results in China, despite Murdoch’s repeated attempts to court that country’s leaders. Star might appear a small cog in a News Corp machine, which had turnover a fraction under $33 billion in 2008, but recent developments have made it clear that the company is paying close attention to Asia, and India in particular.
Unfortunately for News Corp, many others have come to the party in Asia, which makes what happens next in the region so fascinating for Murdoch-watchers.
Got a view?
Email [email protected]
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