Star Tv-India- Rupert Murdock No of channels-10 Categories 5 Advertisers- 9

Important info about ad slot rates: India Vs Sri Lanka: ESPN Star Sports hikes ad rates to Rs 20-24 lakhs/10 sec ESPN Star Sports, official broadcaster for the World Cup, has hiked rates for its reserved advertisement spots to Rs 20-24 lakhs for 10-second slots for the IndiaLanka final, two leading media buyers told ET. The broadcaster's rate for the India-Pakistan semi-final was Rs 17-18 lakh for 10 second-slots, but advertisers had negotiated for less. Before the start of the tournament, ESS was charging Rs 4-5 lakh/10 seconds from sponsors. This was raised to Rs 7-8 lakh and then to Rs 10-12 lakh per 10 seconds as India reached the quarter-finals, according to media buyers. Appliances maker Usha International is hoping to strike a deal for the finals, after having booked slots during the semi-final for Usha fans for the first time in the ICC World Cup.

Revenue: The Rupert Murdoch-owned Star TV Group has come under pressure because of its operations in China and India. According to a recent analysis by Media Partners Asia, an international media research agency, the Star Groups margins have been under pressure for some time due to an erosion of its earnings in India, its largest market in Asia, due to the higher content costs and competition from rivals such as Zee TV. News Corporation, is estimated to have made revenue of around Rs 2,200 crore in the 2008-09 financial year, says a report prepared by Media Partners Asia (MPA),

the international media research agency. STAR India follows a July to June calender. This, according to industry sources gives STAR India a growth of 10 per cent in 2008-09. In 2007-08, it is said to have registered over 20 per cent growth. MPA estimates indicate STAR India posted operating income of around $80 million (about Rs 400 crore) in the last fiscal year (2008-09) on sales of close to $440 million (about Rs 2,200 crore), says the report. The report terms STAR Indias growth as disappointing over the past year. STARs India operations have been hit by intense competition in Hindi entertainment and an overall slowdown in the ad market, whose near-term recovery could be checked by a depressing monsoon season, it says. According to MPA, STAR Indias operating income in 2007-08 was close to $95 million. When asked, Uday Shankar, the STAR India CEO, declined to comment on the specific numbers. However, he said: The year 2008-09 has been a tough year for everyone. There was negative subscription growth from analog cable, with the only silver lining coming in from the healthy growth of subscription revenue from the new Direct to Home platforms. However, even in a bad year we have seen growth. News Corporation recently announced the restructuring of its Asian operations into three distinct units STAR India, STAR Greater China and Fox International Channels. STAR India is said to be the most profitable venture for Murdoch. After the restructuring, STAR India will operate 19 channels in eight languages. According to industry sources, the overall advertising revenue of STAR India may have declined by around 7-8 per cent in 2008-09. However, its subscription revenue registered a high double-digit growth. A STAR India insider says the company would have earned around Rs 850 croreplus from subscription revenue in 2008-09, compared to around Rs 550 crore-plus in 2007-08, a jump of over 55 per cent, while maintaining its overall ad revenue for the 2009 fiscal. The subscription revenue of rival firm Zee Entertainment Enterprises (ZEEL) for 2008-09 stood at Rs 904 crore, while it earned Rs 1,059 crore from advertising revenue. ZEEL follows the April to March financial year. Overall, the total revenue for ZEEL in 2008-09 stood at Rs 2,177 crore, a 19 per cent

jump from 2007-08, thereby outperforming several media firms even in a tough year, says a media analyst. According to Vivek Couto of MPA, STAR India remains a highly profitable business, with decent growth exposure as it secures a national footprint with the launch of new regional entertainment channels. MPA analysts suggest that STAR India could be worth more than 1.6 billion in Ebitda (earnings before interest, taxes, depreciation and amortisation) by the financial year ending June 2013. This, according to Couto is based on more funding for its movie venture, Fox Star Studios, in India. MPA also predicts STAR Indias home shopping joint venture with Koreas CJ Group will take shape, where both parties will invest $27.5 million each over three years.

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Leading broadcaster Star India is set to rake in Rs 1,500 crore in advertising revenue for 2007-08 (July 2007-June 2008), a jump of 22-25 per cent over the last year. The major gains for the company wil come from Star Vijay, Star Plus, Star Movies and Star One channels. This is significant because Star India could only manage a 6-8 per cent growth in its advertising revenue for 2006-07 over 2005-06. According to sources, the Rs 1,500-crore advertising revenue for Star India consists of the contribution of its eight channels (Star Plus, Star One, Star Movies, Star World, Star Gold, Star Vijay, Star Utsav and Channel V). Overall, Star Plus continued to be the major revenue driver for Star India as it is expected to generate 66 per cent or over Rs 900 crore of advertising revenue for the group, sources said. When contacted, Uday Shankar, chief executive, Star India, said he was very pleased with the performance of Star. A number of our channels have done very well during the year. We have gained both in market share as well as in revenue and I can mention that Star Vijay, Star Plus, Star One and the two English channels Star World and Star Movies collectievly have done very well for us.

On the way forward for Star India, Shankar said launching regional language channels will remain the top priority, while the group will continue to explore other interest areas like the Home Shopping channel foray, movie production, and several other avenues. We will launch regional language entertainment channels for sure and we will also continue to explore other areas of interest.

Star TV desires to be back on the revival track, after the Asian business restructuring. Star Plus, the flagship Hindi general entertainment channel (GEC) of the company, after nine years at the top in terms of gross rating points (GRPs), has been upstaged for eight consecutive weeks in July and August by new entrant Colors and arch rival Zee TV. The numero uno status enjoyed by Star Plus for nearly a decade since July 2000, based on two long-running spells of Kaun Banega Crorepati (KBC) in 2000 and 2007, and a slew of family melodramas mass-produced by Balaji Telefilms like Kyunki Saas Bhi Kabhi Bahu Thi and Kahaani Ghar Ghar Kii, has ended. Hindi entertainment television in recent months has become a three-horse race with Colors and Zee TV challenging Star Plus' leadership status. Colors is operated by Viacom18, a joint venture between Viacom Inc and Network18. Zee TV is the flagship Hindi GEC of Zee Entertainment Enterprises Ltd, promoted by Subhash Chandra. Though each of these broadcasting networks have as many as 16 to 24 channels in their bouquets, the big stakes gain dominance in the Hindi entertainment arena. This is because 55 per cent of the Rs 12,000 crore in television advertising revenue goes to this segment. For subscription revenues also, the networks package bouquets of channels with the Hindi entertainment channels priced the highest, and these drive the sale of the cheaper and niche channels.

Uday Shankar, chief executive officer (CEO), Star India, says, "The situation in the Hindi GEC space has changed and it has changed across businesses. In my personal opinion, it will be some time before a clear leader emerges in the space. It could be us or our rival or a new player. Basically, it is hard to do crystal ball gazing." The erosion of Star Plus status started with the launch of Colors in July 2009. With a couple of serials like Balika Uday Shankar Vadhu and Jai Shri Krishna and the star-studded reality shows like Khatron Ke Khiladi and Big Boss, Colors began to eat into Star Plus's audiences. By mid-April this year, only 38 weeks after launch, it had edged ahead to become No. 1. Colors' success was crafted by Rajesh Kamat, CEO, Colors. He knew the broadcasting industry inside out from his long stint as head of international reality show producer Endemol. While setting up Colors, he first poached Ashwini Yardi, programming head, Zee TV known for conceiving a string of hit shows. After that, Kamat challenged the traditional format of the television soap with a storyline featuring a child bride Balika Vadhu. His smart marketing tricks and a strategy that he terms 'differentiation and disruptive' programming, dethroned Star Plus within a year. Star Plus had not kept abreast of changing audience tastes and the long-running Kserials from Balaji Telefilms had exhausted themselves, but Star Plus had failed to replace them with more contemporary shows. The writing was there on the wall. In 2007, a rejuvenated Zee TV with shows such as Saat Phere and Kasam Se and headed by Pradeep Guha had come within inches of overtaking Star Plus. For a week it had notched a record GRP of 303, just four points short of Star Plus then. Star TV was first hit by a leadership crisis in both its Hong Kong headquarters as well as in India. Its Indian operations was the scene of an intense power struggle in 2006 between incumbent chief executive officer Peter Mukerjea and COO Sameer Nair for the top slot. Later, the professional fight was opted for a balancing act with portfolios being divided and both anointed 'chief executive officer'. This papered over the crisis for about a year, but the charade could not go on forever and had to be resolved. By

March 2007, both Mukerjea and Nair left the network to start their own ventures. Mukerjea had joined INX Media and burnt his hands miserably, ultimately quitting from its board few months back, leaving the 9X GEC channel no where in the business. Nair, on the other hand, joined as chief executive officer, NDTV Imagine, which is lying lower to Sony TV as the fifth most watched Hindi GEC in the latest Week 34 TAM numbers. Star TV's Hong Kong boss Michelle Guthrie was also another casualty. Later, Paul Aiello was brought in as chief executive officer in Hong Kong to lead the firefighting, but it was only four months later in May 2007 that Star India got its chief executive officer. Meanwhile, Aiello will also step down from his post by the end of this year. Uday Shankar, who started his career as a print journalist and then went on to head various Hindi news networks including Aaj Tak and Star News. His appointment took time and Star India had allowed competition to grow. By then audiences had grown and become more fragmented with the increasing number of channels. The migration from Star was to the plethora of regional language networks. Moreover, the channel had a weak marketing base in small towns, which was exploited by competitors. Getting the network back on the tracks has been a tortuous grind. The disentanglement with Balaji Telefilms began in August 2008, but the content company went to Bombay High Court to extend the two saas-bahu serials. By November, Star managed to enforce its right to call it quits. Then, almost the entire leadership team in Star quit in 2007 along with either Peter Mukerjea and Sameer Nair, depending on who they were aligned with. After months of churn and uncertainty, Star has a new team in place. Keertan Adyanthaya, business head of Star Plus came in from Nick. Old Sony Music hand Vijay Singh joined as president and later took over the film vertical Fox-Star Studios. Two creative heads were appointed - Vivek Behl for all fiction content across Star's channels, while Anupama Mandloi has been put in charge of non-fiction programming. Sanjay Gupta came in as the network's new COO.

For News Corp, India is the jewel of its Asia operations. Industry estimates suggest that the Indian revenues to be over Rs 2,200 crore a year, making Star India the second largest media company in India after Bennet, Coleman & Company Ltd (BCCL), the publishers of The Times of India and The Economic Times. India accounts for 70 per cent of Star's Asia operations, which spans as many as 53 countries. Therefore, when annual net profits for India fell over 60 per cent from Rs 425 crore for the July 2007-June 2008 period to Rs 175 crore for the year ending June 2009, senior officials at News Corp were worried. Star's India performance though is still better than News Corp's and Star Asia's latest results. News Corp made an overall fourth quarter (April to June 2009) loss of $ 203 million as compared to a year-ago figure of $ 1.1 billion in profits. Revenue fell 10.7 per cent to $ 7.67 billion. For the full year ended June 30, operating profit was around 30 per cent lower at $ 3.6 billion. Significantly, ad revenues from overall broadcasting operations, that includes Fox TV stations, Fox Broadcasting Company and Star Asia, fell 27 per cent for the quarter and 21 per cent for the whole year. In India, Star was hit both by the slowdown as well as by virtue of Star Plus losing No. 1 status. Advertisers became more choosy and invested across all channels, cherry-picking the best programmes on the basis of GRPs or eyeballs they delivered. Though Star Plus has not changed its rate card, it has been forced to give advertisers an increasing number of compensatory free spots on the channel. Shankar acknowledges that growth in ad revenue was for the first time down to a single digit. In comparison, Zee Entertainment's revenues for the April-June 2009 quarter were down 12 per cent to Rs 476 crore, while net profit slipped 43 per cent to Rs 91 crore. Annual revenue was Rs 2,177 for FY 2009, but significantly Zee's subscription revenues, accounting for around 50 per cent of the total, have been more robust than Star's.

It is therefore not surprising that India is at the centre of the recent mid-July corporate realignment at Star. Rupert Murdoch's son James Murdoch, chairman and chief executive officer, News Corp - Asia and Europe. Star India and Uday Shankar now work independently reporting directly to James Murdoch instead of kowtowing to Hong Kong and Paul Aiello. Cost-saving is the underlying principle as the move aims to consolidate overlapping operations that will reduce the number of jobs in Hong Kong. Shankar has been entrusted with many more responsibilities. He will now also look after the sales and distribution offices of Star in West Asia, Britain and the US, besides growing the Indian market. The restructuring shows the significance of India in the overall business of News Corp. Shankar says, "India will become an independent business unit, we will have to relocate the uplink of our channels from Hong Kong to here, subject to regulatory approvals. This will also give us more focus to develop new business related to the broadcasting space, including developing local formats that could work in the international markets." After nearly two decades of operating its entire Asian broadcasting infrastructure from Hong Kong, Star TV will soon shift a part of its uplinking operations to India. This includes those of all India feeds, from here instead of Hong Kong. This move will make Star India responsible for uplink and downlink of all Indian channels instead of Star's Hong Kong office. So, Star India will have to apply for an uplink licence for its channels to the Information and Broadcasting (I&B) Ministry. So far, Star India has only got the landing rights (downlink permission) for its channels in India, as the uplinking happens from Hong Kong. For getting an uplink licence, Star India will have to apply afresh for both uplinking and downlinking to the I&B ministry, a first for it since its inception in the early 90s. For Star India, it means channels like Star Plus, and the India feed of English channels like Star Movies, Star World and the various regional channels will be uplinked from within the country instead of Hong Kong. So far, only India-centric channels will be shifted from Hong Kong to India for uplink. However, once Star India establishes an uplink hub in the country, it may

be used for uplinking other channels too. Uplink of television channels involves beaming these from an earth station to a satellite for distribution over a particular geographical area. Uplink involves seeking several permissions from the country of origin. In India, the various clauses laid down in the uplinking licensing conditions include maintaining the foreign investments in the local company under 49 per cent for non-news channels, home ministry clearances for key executives on the board and maintaining minimum net worth criteria, among others. "India will become a complete independent business entity, post the restructuring exercise. Subject to regulatory and government approvals, we will relocate uplinking of our channels to India from Hong Kong. This may lead to creation of jobs also." Shankar says. Shankar moves on to explain that the Indian operations have been reshaped to sharpen the network's creative edge and conserve cash. Replacing the old, traditional structure of appointing heads for each of the channels, Shankar has opted for three overarching silos of command. A third unit, a team of creative executives known as the 'Idea Lab', is committed to strenuous concept development for new shows across the entire network and works as the content engine for Star. Speaking about his new brief, Shankar says, "The brief is to maintain leadership position in the categories, where we are the leader and to build leadership positions in the areas we have recently entered like the regional space. But the key mandate, post restructuring, comes straight from James - to further localise the business." "There is a lot of scope to develop local formats and concepts that can work in the international markets. India can surely emerge as the resource base for the international operations of News Corp. All this is part of my mandate now." Shankar says. The DTH venture Tata Sky in which News Corp holds 20 per cent is second to Zee's Dish TV, but growing at a faster pace and in the more value-added markets. Similarly, Star is a 22.2 per cent partner in the one of the largest cable networks, Hathway Cable & Datacom.

It is also 50 per cent owner of a cable distribution JV Star-DEN with Raghav Behl's Digital Entertainment Network (DEN), and has an 81:19 per cent JV with south-based Jupiter Entertainment Ventures. Speaking about the regional market, Shankar says, "The regional markets will grow from the current level and so will their percentage share in the overall space. We are number one in Kerala and West Bengal, number two in Karnataka and doing well in Maharashtra and other states."