Is Star struck?

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Its programming, not its departing head honchos, are what will make or break Star, say industry observers.

SAMEER NAIR, Shah Rukh Khan and Siddhartha Basu, CMD, Synergy Communications, at a press conference in Mumbai to announce another season of Kaun Banega Crorepati.
SAMEER NAIR, Shah Rukh Khan and Siddhartha Basu, CMD, Synergy Communications, at a press conference in Mumbai to announce another season of Kaun Banega Crorepati.

Purvita Chatterjee

It is the viewer who makes a difference to Star and not necessarily its top people. _ Ashutosh, Business Head - Filmy

The Taj Land's End poolside at Bandra looked crowded the evening KBC made a comeback on Star Plus. The reason being that Shah Rukh Khan and family were watching the live show of the first day of KBC along with Sameer Nair, the outgoing CEO of Star Entertainment. The timing for its re-launch couldn't be more ironic as Star formally announced the resignation of its two top executives (Sameer Nair, CEO, Star Entertainment, and Peter Mukerjea, CEO, Star Group) on the eve of the show's return with Shah Rukh Khan as its new anchor.

Six years is a long time for any broadcaster to reign but Star intends continuing that feat. Considering the two key men who helped Star reach the skies are on their way out, the broadcaster now has the onus of replacing its key employees and stopping the slide in its leading programmes (and revenues) of its flagship channel - Star Plus.

Lakshmi Narasimhan, National Director, Central Trading Group, Group M, claims, "The ratings of Star Plus have been sliding over the past one year by an average of almost 30 per cent. There have been rate pressures leading to revenue loss across all day parts of the channel. Only when the performance of the day parts of the channel improves and there is a demand for its programmes will the channel make a come back. While KBC has shown a big spurt in viewership, it will not help the channel across the board. The challenge for the channel and the group is to stem the rot and build itself once again on the back of KBC.''

Adds R. Gowthaman, Managing Director, Mindshare, "December has not been a good month for the channel as it has managed to fill up just about 60 per cent of its ad inventory. Its ad rates have been dipping on a sustained basis over the past year and now it is probably waiting for KBC to help fill up its ad inventory.''

While none of the outgoing executives are willing to admit to business pressures, their exit, along with Star Group (Asia) CEO Michelle Guthrie's resignation, is in itself an indication that all is not well with the Star Group in India. While Nair was not available for comment, Mukerjea was forthcoming about his resignation. Having worked for the group for the past 14 years, Peter Mukerjea, CEO, Star Group, said, "I have decided to move on, largely for personal reasons. I believe Star already has a team in place and is well equipped to step up and deal with the necessary requirements.''

Denying any pressure on Star's businesses, Mukerjea added, "For the past 14 years that I have been here, there has never been a single day when I have not enjoyed coming to work.'' Mukerjea has yet to decide whether he wants to go back to the broadcasting business. For the present, he has joined his wife's company (an executive search firm) as Chairman. Both Nair and Mukerjea have have cited different reasons for leaving the group.

While it will get tougher for Star to stay on top, the gap with its competitors continues to loom large. Kunal Dasgupta, CEO, Sony Entertainment Television, says, "There is still a gap with the market leader. More than loss of management, Star needs to build on its programming and it is an opportunity for Sony and Zee to get an opening at this point of time. It is a cyclical business and Star is now at the wrong end of the cycle. Both Nair and Mukerjea have already given it what ever growth it could get.''

Zee, too, after restructuring itself, is preparing to climb back to its dominant position. Ashish Kaul, Senior Vice-President, Zee Network, says, "Star Plus has built its wall brick by brick. It started with a serial like Saans and then came KBC followed by the K serials. It has identified its flagship properties.

At the same time, the media business is no rocket science. Competitors in this business are also intelligent and if not us, even Sony can make a comeback. With so many channels being launched, for all you know, there might be a shake-out in the year 2010.'' While Zee has been betting on its successful serials such as Saat Phere and Betiyan to make a comeback, Sony will be using the ICC World Cup as its next big salvo to boost its bottomlines.

As Star Plus struggles to regain its ratings, it will be depending heavily on Shah Rukh Khan and KBC to get back its numbers. According to the former COO of Sahara One Television, Purnendu Bose, "It was on the back of KBC that Star attained its leadership position. With Shah Rukh now at the helm, it will now get to keep its leadership position as the aMap numbers are already showing. At the same time, it needs to tighten the rest of its programmes.''

While the aMap numbers, which track the overnight ratings for any programme have been positive for the first show of KBC, it might take a while to measure the exact impact of the show once viewers have settled down to watching it. Tapan Pal, CEO, aMap, says: "Star TV is still the leading channel. In the case of Star, the latest KBC with Shah Rukh is not going to make a paradigm shift unlike the first season of the programme. No channel can depend on just a reality show, in any case. It is not easy for any broadcaster to stay on top for five years in spite of which Star has continued to dominate. There has been stiff competition and it will not be easy for it to continue as a dominant player.''

But it may still take a while for competitors to catch up with the leading broadcaster. Observes Ashutosh, Business Head - Filmy, Sahara One Media and Entertainment, "There is some lead time given to viewers for the ratings to come down and changes in the top management are not going to make a difference. None of its competitors had any of their programmes in the top 100 and now may be there are a couple of them. It is the viewer who makes a difference to Star and not necessarily its top people. The situation is not alarming as the channel's share is already so high. In fact, in no market has any channel managed to get such a large share and the channel has enough lead-time to stay in its strong position that it is in today.'' At the same time, Star's programming has been facing flak. Claims a media industry observer, "It is a loss for Star at the top management, but a fresh pool of talent can always replace it. Star has been lacking freshness in its programming and has been depending heavily on its old fare of programmes. It is that powerful platform which has been helping its channels get the numbers.''

But it is not as if Star has not been focusing on its programming. The success of shows like Nach Baliye and the Great Indian Laughter Challenge has already helped Star One (the flanking channel of Star Plus) become popular in the metros. In fact, spending lavishly on content has always been a norm for the broadcaster. As the chief guest at last year's Media Review, Nair had said, "We believe in giving our viewers something which will absolutely delight them.'' Spending heavily on acquiring movie rights is also another way of `delighting' viewers as Nair himself confessed during the Media Review that "movies are important since they manage to earn 10-12 per cent of all our revenues through ads." Hiring at astronomical sums the likes of Amtitabh Bachchan and now Shah Rukh Khan for KBC is also a way of hooking its viewers and has been paying off for its flagship channel.

Changes in top management are not being regarded as an impediment for the broadcaster as the bulk of its back-end employees running the company is intact. Praveen Tripathi, Chief Executive, Hansa Consulting says, "Star will not fall like a pack of cards. It is not as if only Sameer Nair knew programming. He had a strong team behind him and as long as that team does not migrate, there should not be a problem. The main challenge for Star would be to find a good creative leader.''

Adds Keertan Adyanthaya, General Manager, VH1, "There is a temporary blip in leadership at Star but the rest of the nuts and bolts are in place. Star already has a strong second line of leaders who have been running its systems. The biggest challenge for the group is to find someone with the kind of experience and stature of people like Mukerjea and Nair who have been with the group almost since the birth of satellite television.''

Till such time, Star will be facing a challenging scenario with increasing competition and audience fragmentation. As Raj Naik, CEO, NDTV Media, claims, "Star's biggest challenge will be to find people who understand the value of the organisation and the market dynamics. It will be important for the group to build a strong management team once again.'' Finding the `right' stars to head the organisation is the priority for the leading broadcaster which has hit a rough patch in the country.

(This article was published in the Business Line print edition dated February 1, 2007)
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