Vanita Kohli-Khandekar - The Making of Star India

Many years ago, a senior manager in Hong Kong told me a delightful story about Rupert Murdoch getting excited over a cheap haircut in China. And about how the staff of the company stopped the enthusiastic executive chairman of News Corporation (now 21st Century Fox or 21CF) from going to a dodgy neighbourhood. Funnily enough, Murdoch is not a bargain hunter when it comes to business. He has no qualms about blowing up billions of dollars on his hunches and visions, much to the dismay of analysts and investors. In the 1980s, he bet on satellite television, and by 1991 he had almost lost News Corp to the debt that had piled up as a result. In the process, he created one of the worlds largest pay TV brands, BSkyB.

Just when News Corp was crawling back towards profits, he went ahead and blew up more than $870 million on Star TV, the first and only pan-Asian broadcaster. When Murdoch bought Star TV from Richard Li in 1993, TV reached just about 200 million Indians. Now that figure is 836 million. More than twenty-five years later, with a top line of over $2 billion, Star India is one of Indias three largest media firms with over sixty channels reaching more than 700 million people. In March 2018, it contributed close to 7 per cent to 21CFs $30.4 billion top line. It is one of our biggest growth drivers in the company, said Joseph Nallen, senior executive vice president and chief financial officer, at a Deutsche Bank media and telecom conference in March 2017.

Murdoch didnt know all this would happen. What he saw and bet on was a large, educated, 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 democraciesthat is why in 2007 he finally gave up on China, a market he had long coveted. When India delivered on its promise, almost a decade after he had invested, News Corp became the cynosure of every media investors eyes. This is the first reason I chose to write a book on Star.

News Corp was the first global firm to showcase the potential of the Indian media market to the world. Thanks to its play, New Yorkbased analysts were closely tracking the Indian media market, catalysing several billion dollars worth of investments. They still do. Go through dozens of transcripts of conferences and earning calls between senior 21CF managers and analysts at Morgan Stanley, Goldman Sachs or other firmsIndia is always there. A hundred investor summits could not have done what one mans gut instinct did. Rupert [Murdoch] looks at business in such long cycles that people dont believe it. Dont look at ten-year time frames, look at thirty-year time frames, he says. Because of this, his patience and appetite for investments are huge. We reinvest everything that we earn in India and that is why we have been able to build and grow our business so actively. No other Indian media company is in such a continuous investment and growth mode, says Uday Shankar, chairman, Star and Disney India, and president, APAC, direct-to-consumer and international, The Walt Disney Company.

Over the years, Star brought many things to India: Channel [V], Indias 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 countrys biggest video streaming apps with Hotstar. It resurrected Amitabh Bachchans stardom thanks to Kaun Banega Crorepati in 2000 and changed the rules of television for good. It gave us Ekta Kapoor, and, along with Zee, kick-started the whole Oshiwara/Link Roadbased Mumbai TV production industry.

The casual, confident, irreverent India on display on Channel [V] touched a chord. Stars first attempt at localization was a success. For a foreign company that was trying to find its footing in a nascent market, Channel [V] brought home critical lessons. Star learnt that the Indian market was about local content, local management and completely local thinking. It is a lesson Star has absorbed well from the start, which is why it is one of the most successful foreign firms in India. India is the only business in Asia where they are deeply embedded in the local content ecosystem and have a massive sports business. Other global-owned businesses in the region are selling Hollywood content through sales and marketing but dont have a large-scale local content business, points out Vivek Couto, executive director of Singapore-based consulting firm Media Partners Asia. As Stars arch-rival and former partner, Subhash Chandra of Zee, puts it, They have done a good job not because of News Corp, that is the financial part, but because of our (Indian) people.