Campaign India Team
Jun 24, 2010

Uday Shankar's interview with Campaign India

It’s ten years since STAR Plus went Hindi, and, with the celebrations, a new identity and positioning has been revealed. Campaign India’s Anant Rangaswami met Star India CEO Uday Shankar to understand the need for change and the implications  What is the need you felt for the change? More than one reason. First and foremost, STAR Plus, which went on to become an all-Hindi channel which is really successful, hasn’t had the time or even the need to look back and re-examine itself.

Uday Shankar's interview with Campaign India
It’s ten years since STAR Plus went Hindi, and, with the celebrations, a new identity and positioning has been revealed. Campaign India’s Anant Rangaswami met Star India CEO Uday Shankar to understand the need for change and the implications 
 
What is the need you felt for the change?
 
More than one reason. First and foremost, STAR Plus, which went on to become an all-Hindi channel which is really successful, hasn’t had the time or even the need to look back and re-examine itself. When competition came, the whole environment of Hindi entertainment had become congested and changed considerably. Since I came on board from a very different industry, the question topmost on my mind was, were we doing everything right, everything wrong or some things right and some things wrong? The hunch was the last of these, but we didn’t know conclusively for sure what we were doing right and what we weren’t doing right and we needed to understand that. 
 
Then the second reason was  something that we were very sure of: the universe of television viewership had changed remarkably in the last 10-15 years. In 1999-2000, it was primarily a big city and upper-middle class phenomenon. In the last 10 years, it’s gone far deeper into the country, into small towns and semi-rural India. Also, because of the technology options available, it was going into the rural areas through DTH. The demography of the viewers who are coming into TV now, and spending a lot of time, is tremendously different from 10 years ago. Hence, the stories had to change, the way they were told had to change, the cast and characters had to change; all this had to happen. In effect, it meant we had to reposition Star Plus. 
 
The third reason was that what worked for the channel very well had gone on to work well for a long time, but in the process there was a certain amount of homogeneity that crept in. A certain kind of story, a certain way of looking at stories and characters had become more dominant than it should have been. 
Now all of this (repositioning), wasn’t easy to do. First, one had to align everybody internally and then go and do it externally. And you couldn’t do it in incremental, slow, gradual approaches. So we decided that we would define a deadline, we would start working, and we would  completely reinvent the channel.
 
How would you measure how well you’ve done a year from now?
 
Primarily for anything that we do, we have to remember that we are mass media. Ratings are an important 
currency for commercial success, and we would like ratings to go up; that’s a given. Beyond that, there are two things that are important that I am personally very keen on: I would measure the success of the initiative on those two. First, is to see how many new kinds of viewers we have been able to add. Second, is to measure how much of agenda-setting we have managed  to do. I’m a firm believer that leadership comes from owning the agenda and once you own the agenda, market share is a lag factor that always follows. 
 
With STAR Plus, Colors and Zee all in the mix, doesn’t this put pressure on yields?
 
It does put pressure for a very simple reason: it allows the buyer to play one against the other and because there are many other players, there’s a certain level of desperation sometimes amongst some of them to come in and do a deal lest somebody else walk away with it. So that’s the kind of pressure that comes. However, if you see the objective record of what’s been happening to revenues in Hindi GECs over the past year, we’ve grown very healthily, though we don’t disclose figures. Zee has grown, Colors has come into the mix and done well in revenue terms, so have other players like Imagine etc. So, actually the share of advertising revenues in Hindi GECs has grown. 
 
How do you get ad rates up?
 
There are two issues: the first is a fundamental problem with the currency itself. When you use CPRP, which is a percentage and doesn’t capture the absolute numbers, it’s a very devious measure to completely negate any absolute growth in the universe of viewership. As a result of that, while every year several million viewers are being added to the TV universe, the broadcasters are not getting the benefits of it. The second issue is with the broadcasters themselves. There’s been so much oversupply of inventory because of new launches and it’s such a heterogeneous mix of broadcasters that the ability of the people to hold on to prices and sell in a sophisticated manner and negotiate against a consolidated buying environment is very limited. It’s a big challenge. We haven’t met with any success. There are many conversations but there hasn’t been any measureable success. As a result, the vast majority of the broadcasting universe today is a loss-making enterprise. With the exception of a few companies, everyone’s losing money. They have managed to hold on so far because of easy access to funding and the games that they can play in the capital markets to raise money. But this will have to be corrected because there is the risk of getting impoverished and not investing in all the critical areas whether it is content, technology, brand building etc.
 
What about the enormous leakages in your other major revenue area, distribution?
 
That problem is an even bigger problem. It works on various levels. There are huge leakages and people are not being paid in a fair manner. It is also putting pressure on the new forms of delivery because the more transparent, corporate and professional you are, the more you will pay, and the less transparent and professional (like the cable operators) don’t maintain records so they don’t have to pay anything. It’s also a loss of revenue to the exchequer which is a big thing. The other big problem as a result of this, is that there has been no modernisation of cable. As a result, the delivery bandwidth is totally choked. So today the biggest share of your spends for some channels, more than any other head for some categories, goes in carriage fees. We haven’t had any breakthrough in this mostly because of the heterogeneous mix of broadcasters. When it comes to distribution, it becomes even more complex. There is no categorical segmentation there. Everybody, no matter what kind of niche you are in, still needs the same frequency and bandwidth, so somebody’s always willing to pay. So some property dealer who wants to run a channel because he wants to keep the authorities at bay, will always go and pay the aggressive carriage fee. Somebody who’s raised money heavily through private equity can squander that money and go and pay. These two continue to be the biggest problems. The irony is that while broadcasters are very focussed on aggregating market share, they’re not at all focussed on coming up with solutions which are big bottlenecks to monetising the market share. 
 
What are the plans for the other channels in the network?
 
The Star network has come together very well and we will build on that further. It cannot be done unless we bolster every channel in the portfolio. We cannot have a more favoured channel and a less favoured channel and that happens when GRPs and revenues are the only metric of success — then you invariably fall prey to that. If you do not support any channel which doesn’t contribute the same number of GRPs, which are a factor of several things like the space in which you play, no other channel in the network will grow the way STAR Plus has, no matter how well or otherwise it does. We’ve started work on this. The success of Channel [V] in the last 8-9 months has been very satisfying, just because they’ve been very focussed on it. A very aggressive team has come in, they’ve been very pig-headed about it, put the blinkers  on and focussed on getting things right. Institutionally and internally, we have managed to create a very clear focus on Channel [V]. We’re doing similarly with some of our regional channels. Jalsa has worked very well, Pravah is growing nicely. As for our Karnataka channel Suvarna, about a year ago when we took over Asianet, it was a bit weak and we have grown from there to get to the number two position. My key focus personally has been to make sure that we create indepenedent management units for each of these channels and empower them and set very clear targets. 
 
Anything Star India will come up with in the next year?
 
The print business doesn’t make sense as long as the current ownership norms exist. They are designed to reduce you to a financial investor, and we are not in the business of financial investment. If we were to get into the print business because we understand that business, we can bring in our international expertise and create great value for ourselves and for the readers. But if the current rules prohibit you from having either an editorial influence or an ability to shape the course of the business, it doesn’t really make sense. 
 
The one area which we’re very excited about, and there’ll be movement there that hasn’t been gossiped about much for some reason, is the home shopping business, STAR CJ. We’ve just got our license and soon we should be rolling out our 24-hour channel in a matter of a couple of months, I hope. We feel given the fact that wealth and consumer spending in this country have got very decentralized and is happening all across the country, quality retail products haven’t reached those markets. A 
television-based business of this kind with the brand comfort and credibility of Star can be a very compelling proposition in this country.  

 

Source:
Campaign India