Rupert Murdoch and his ‘mad bet’ on India media

The story of Rupert Murdoch’s India adventure has all the ingredients of a ‘masala’ movie. As you turn the pages of The Making of Star India by Vanita Kohli-Khandekar, you realise that two factors powered this journey of the Australian-born American media owner: His instinct and the ‘K’ factor — Kaun Banega Crorepati , Kyunki Saas Bhi Kabhi Bahu Thi and Kahaani Ghar Ghar Kii — the runaway hit shows on his Star Plus TV channel.

Star TV, launched in 1991, has seen changes at all levels — from the top management to a complete change of guard at the owner level; from an extremely entrepreneurial, cowboyish company to a cautious, process-oriented, typical American multinational.

Late in 2017, entertainment and media giant The Walt Disney Company made a $52.4-billion bid for a bulk of 21st Century Fox’s assets. After the drama of counter-bids and negotiations — typical in such corporate acquisitions — Fox finally sold its assets to Disney for $60 billion. Among the entities Disney acquired from Fox was Star India, which, according to the author, has the most potential for growth and expansion.

The deal reportedly valued Star India anywhere between $10 billion and $15 billion. A million-dollar question, which Kohli-Khandekar leaves unanswered, is: “As Star goes through the steps of becoming a Disney operation, what does the future hold?”

There will be a lot of cultural conflict and some changes in the management style, the author tells BL ink . But that is all that she is willing to say at this stage.

As a newsperson tracking the media and entertainment sector for decades now, Kohli-Khandekar brings to the book her insights into the Star management’s moves and the characters involved in it. She points out that back when Murdoch first bet on India, it was not seen as a big market. But Star proved that it was. “It was an informed gamble with some vision that paid off. His stock was downgraded when he bought Star TV. He had to give up some of the controlling stock in his own company when he bought Star TV and he hates losing control.”

In the chapter titled ‘Rupert’s Discovery of Asia’, Kohli-Khandekar focuses on an “Australian media mogul, a mad bet and an Indian marriage”.

She writes: “Murdoch didn’t know all this would happen. What he saw and bet on was a large, educated and skilled population just freed from its economic shackles. He had just discovered Asia and knew that rising economies make for great media markets. Over the years, Murdoch probably learnt that they also need to be democracies — that is why in 2007 he finally gave up China, a market he had long coveted. When India delivered on its promise, almost a decade after he had invested, News Corp [the media company Murdoch founded in 1980 and ran until it was split in 2013] became the cynosure of every media investor’s eyes... New York-based analysts were closely tracking the Indian media market, catalysing several billion dollars more worth of investment.”

The author stresses that Star has shaped the Indian media and entertainment ecosystem as much as it has been shaped by it. “Over the years, Star brought many things to India: Channel [V], India’s first music channel, in 1994; Star News, its first news channel in 1998; and Radio City, the first private radio station in India in 2001. It also revived an ancient Indian game through the Pro Kabaddi League, and created one of the country’s biggest video streaming apps with Hotstar...”

Through all of this, Star understood from the start that the Indian market was about “local content, local management and completely local thinking”. As Star’s arch rival and former partner Subhash Chandra of Zee Entertainment says in the book, “They have done a good job not because of News Corp, that is the financial part, but because of our (Indian) people.”

The Making of Star India; Vanita Kohli-Khandekar; Penguin Random House; Non-fiction; ₹699

In 1992, India had an estimated ₹1,500-crore (just over $500 million) media and entertainment industry. Today it is ₹1,67,400 crore ($23.9 billion). While television has remained the largest segment, growth is expected to come from digital, which will overtake film entertainment in 2019 and print by 2021. In 2018, digital media grew 42 per cent to touch ₹16,900 crore.

However, along the way, the foreign broadcaster exited news. The Star News tie-up with Prannoy Roy’s NDTV ended in a divorce.

As Kohli-Khandekar writes in the book, “Murdoch is a news buff. The political and social context of a country and how its news industry operates is one of his favourite topics of conversation… In most markets where News Corp had a news presence — Australia, the US, the UK — the rules were clear. In India, they were not. In print, foreign firms had been grudgingly allowed 26 per cent foreign investment in 2002, but the ground rules for news broadcasting was not specified. It was against this backdrop that differences between Star and NDTV began.”

Another reason for exiting news was that editorial control was not possible with a 26 per cent cap on foreign shareholding, as also the lack of returns. “For a foreign broadcaster to remain in news in India doesn’t make sense. It is a most unprofitable business,” Kohli-Khandekar says.

The author also leaves us with a poser. “Star thrived first under a Chinese owner and then an Australian one. It will be intriguing to watch what it achieves under this very American one,” she says.

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