What was seen as a coup for both sides when Star and ABP joined hands in 2003 turned out to be a turbulent alliance. And this may also mark the end of Rupert Murdoch’s dreams of being a big player in the Indian news market
April 17, 2012
The intense speculation for more than a month doing the rounds of the industry over Star and ABP Group preparing for a split finally became official news yesterday evening with a formal announcement from both the partners. ABP was the first to put out its press communiqué, a cryptic, barebones press note with no quotes from either its side or that of its partner.
Reading between the lines, it is clear that it was a cozy relationship that had gone awry at some stage of its eight-year-long span. Said the Star India press communiqué that followed later in the evening, “This was one of the steps proposed to be taken by Star in its endeavor to refocus and reenergise the core strength of its business, viz., general entertainment channels. Given the current regulatory environment and structural issues ailing the Indian cable and satellite television market and the news genre in particular, Star took this extremely difficult decision to withdraw its brand from the genre.”
The discontinuation will come into effect in phases over a period of two to four months and the partners will work together to ensure a smooth transition during this period, the Star India press statement said.
For the record, MCCS was formed on March 31, 2003, and was meant to have a lifespan of 10 years. It finally fell short of this projected lifespan.
Coup gone sour
The formation of MCCS itself was a talking point; it was even seen as a coup for both sides. For Rupert Murdoch, the biggest media tycoon in the world, it was an entry into India’s restricted-to-foreigners news market. For ABP, one of the largest media houses in the country, and a journalistic talent house based in Kolkata, it provided a credible and strong foothold in the television news domain.
But whispers of internal turbulence and differences began to surface a few years after the initial euphoria of the honeymoon phase was over. Editorial control was a sticky issue at most times, according to insiders. But several other operational and management issues appear to have aggravated the situation to a point of no return. In a board meeting of MCCS held in Mumbai in 2011, the differences came out in the open, which many media observers felt was a clear indication of the fate of the JV. During this time, both Star and ABP had also toyed with the option of buying the other out.
According to media industry observers, it did not go down well with the Star Group that ABP Group independently launched a Bengali general entertainment channel, Sananda TV, to take on the popular Star Jalsa in the Bengali GEC space. ABP, too, was not happy when last March, Star India entered into an ad sales alliance with rival broadcaster NDTV for its three news channels. Star has always maintained that the NDTV alliance was restricted to sales and had nothing to do with editorial content. The reason for ABP's unease was not far to see. Both MCCS and NDTV have competing Hindi news channels, Star News and NDTV India. Ever since the NDTV-Star deal got announced, there has been speculation that this was a case of old partners joining hands again to forge a bigger, strategic association which may even lead to an equity tie-up in future.
It was even said that ABP was not entirely kept in the loop while the negotiations between NDTV and Star were on. At that time, ABP’s Managing Director DD Purkayastha had told Business Standard: “Star has not spoken to us about any sales alliance with NDTV. So, I cannot at this point comment on any conflicts.”
End of the Murdoch dream?
Interestingly, the parting of ways between the two promoters of MCCS could also signal the end of Rupert Murdoch’s dreams of getting a long-term foothold in the Indian news media. This is the second time that his efforts have come a cropper. On a previous occasion, Star Group had entered into a tie-up with NDTV wherein NDTV was supplying the entire news content to Murdoch’s Star News in India. Along the way, Pranoy Roy decided to foray into the television news business on his own, and launched NDTV in English and NDTV India in Hindi.
This time around the chances of Star Group making a comeback in television news appears a distant possibility. The main reason is that Rupert Murdoch is an embattled media tycoon today. He is fast becoming a fallen hero in international markets, and is fighting with his back to the wall after a string of exposes into the modus operandi of some of his best-known media products in the UK. And he is facing the heat even in the USA. His son, James Murdoch, is not a patch on the old wizard, and has been tactically made to retreat to the USA to avoid the heat currently being generated in the UK after the mishandled phone-hacking scandal.
But there is bad news across the Atlantic too. The British hacking scandal is set to hit American shores too. British attorney Mark Lewis is said to be planning to sue in the US on behalf of alleged hacking victims, according to media reports. The legal action would be the first to strike at the heart of Murdoch's global media empire.
And a new book, ‘Dial M for Murdoch’, by the Labour MP Tom Watson and The Independent journalist Martin Hickman, which is slated to hit the market this week, promises to expose the connections between Rupert Murdoch's British newspaper group and senior politicians and police officers. Subtitled "News Corporation and the Corruption of Britain", the 350-page hardback concentrates on how News Corp's News International, publishers of the News of the World, Sun and Times, used its political influence to cover up illegal newsgathering techniques.
For this once, it is a case of the news business turning into general entertainment!
Murdoch could look at another alliance with NDTV now. They need the money and Murdoch wants control. Would work for both.