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Star India expected to become a billion dollar EBITDA by 2020: James Murdoch

Star India CEO Uday Shankar attributes these expectations to the sports and regional channel businesses

BestMediaInfo Bureau | Mumbai | April 28, 2015

STAR-logo-new-480

James Rupert Murdoch, Co-Chief Operating Officer, 21st Century Fox, expects Star India to become a $1 billion company in terms of operating profit by end of the year 2020. Murdoch was speaking at the recently concluded Asia-Pacific Pay-TV Operators Summit, held in Bali from April 22 to 24, 2015.

James Rupert Murdoch James Rupert Murdoch

Speaking at the event, Murdoch added, “We love the India business. It has now evolved enormously from Hindi entertainment to regional language broadcasting and now we are a national platform. The sports business for us is a new pillar and we are looking at the business in a long term time frame. And if we keep innovating and investing in putting more creative and innovative content on screen, Star India will become a billion dollar EBITDA by the turn of the decade.”

Uday Shankar Uday Shankar

Attributing the growth to sports properties and regional channels, Uday Shankar, CEO, Star India, said, “I am prejudiced towards aspirational content and cynical about cynical content. This is something we have always kept in mind while creating all of our content and is the same philosophy that we are bringing to sports as well. Sports has a huge role to play in empowerment, especially in a country like India, where we need to make the society believe that even an uneducated person can aspire to something greater if he is talented in a sport. This is what has worked with Kabaddi in a big way.”

The network recently acquired 74 per cent stake in Mashal Sports, which is co-promoted by Anand Mahindra and owns the successful Pro Kabaddi League. Shankar observed that the acquisition of majority stake in the entity was with a vision to create an even more favourable ecosystem for the sport of Kabaddi and build on its successful launch. “The investment, completely in sync with Star’s aim to spawn a multi-sport culture in the country, will further help in nurturing India’s sporting talent. We are totally committed to abiding with the vision of Mashal management and all stakeholders of Pro-Kabaddi and will further develop the league in the upcoming season two,” he added.

Noting that India is a giant country with varied cultures and tastes, Shankar pointed out that the network used Asianet as a beach head for the south and elevated the quality of content dramatically with sharper storytelling, involving the best of the creative fraternity and breaking the caste divide between film and TV.

He believed that the same philosophy, which was employed for their entertainment business, could be applied for the sports business. “Sports broadcasting has been plagued by laziness and lack of innovation, treated merely as a distribution agent of acquired rights, which is what we have tried to change with multiple local leagues. If it’s your team that’s playing you, even if it is not the best team, you would be deeply passionate about it. Creating a hierarchy of leagues across the country can be huge empowering phenomenon,” he added.

Sanjay Gupta, COO, Star India, felt that lack of innovation was stifling the sports business economics. He said, “When there’s a big sporting event, people congregate to watch in huge numbers, the only question is whether there are enough of these happening and how much innovation has been happening. Better engagement in sports will drive greater consumption. People don’t look happy when they win a sports bid. Practices in the sports business have become quite toxic. Instead of a content creation business, this has been run as a rent-a-cab business.”

“If I am a league owner, chances are I’ll squeeze more money from you than you can ever hope to earn. That innovation we have tried to do is around Kabaddi and the response has been amazing. It was a short, high-intensity sport with vast local connects,” he added.

According to Gupta, one of the challenges that we were seeing was that almost all of the investment in sports was going into rights cost. He explained that the network was trying to change that by investing in basic sports infrastructure, apart from rights, whether it was grooming the players for an on-screen experience in Kabaddi or partnering to get the stadiums ready for ISL.

Agreeing that sports is a long haul business and it takes sustained investment to build something ground up, Gupta observed, “We need to have a long term commitment to build a sport, a 10 to 20 years approach to build it ground up. Take the example of EPL, which has been around for decades and has built an extremely strong consumer franchise, which advertisers are eager to associate with.”

“Three-year view of buying sporting rights has to change. This current regime disallows most of the partners to make money and disincentives anyone trying to build a sport,” he noted.

Banking on the success of Hotstar, Shankar noted that the objective behind Hotstar was quite simple. He revealed, “A lot of audiences were consuming our content on other screens, but we were unhappy with the inability to control their viewing experience. We realised we own all of this IP and so came Hotstar. I do not think that this is a ‘free model’. We need to keep the consumer at the centre while thinking about this and in a market like India, where data costs are still pretty high, the consumer is still paying a lot for the data – so it’s not particularly consumer-friendly to have them pay twice, especially at such a nascent stage. The reason I’m excited about the OTT space is because it allows for democratisation of creativity. However this is not the same as saying that anyone can create content,” he explained.

Info@bestmediainfo.com

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