'We will continue to rule the airwaves...' : Peter Mukerjea - Star India CEO

One could be excused for wondering if the head honcho of India's largest media house and largest-by-far broadcast company isn't getting bored of the sameness of it all. For Star India CEO Peter Mukerjea, it's four years and counting, leading a company that has enjoyed overwhelming dominance in its space.

But there's no sitting on the laurels either for Mukerjea or his team as Rupert Murdoch's suave pointman in India readies to lead Star on its next big leap forward.

Mukerjea holds forth on all this and much more in a tete-a-tete with's Anjan Mitra.

How do you view the situation today vis-?-vis the company?

The company has been more or less on track as far as broad plans are concerned. But we also need to look ahead for newer business opportunities in areas that we may not have looked at in a focused manner. We are in the process of doing that. There are several plans on the drawing board, which would need some time to be executed. But on the other hand, there are some other plans that are close to being executed. Rather, one can say the process has already started in a small way. The forays to exploit the wireless technology, for instance and offering to the market new products.

Would you elaborate on the some of the new initiatives? Wireless, for example?

We are tapping business opportunities that wireless technology offers in countries like China and India. Star India has recently created a division for this that would be headed by a Star person (Sumantra Dutta). If you see globally, wireless technology is becoming all encompassing and our attempt is to be ready with a firm business plan when it actually explodes.

"Though the language would be Hindi on Star One, it'd be zippy. It'll have sitcoms, talk shows, holiday getaways, gizmo talk, etc. But it's not a lifestyle channel"

What exactly is being done in India in this regard?

The idea is to target mobile phone users. Now, how do we do that? For starters, we need to leverage our existing strengths of television in India. There is also no denying the fact that usage of cell phones in India is increasing and there are many homes where there are multiple users. If out of the total (45 million odd) cable and satellite homes, there are 27 million C&S homes where there are people with cell phones, we have a sizeable market.

I am also not saying that we'd be able to tap all the 27 million C&S homes. Even if we manage to tap around 10 million of these homes initially in a year's time and get people hooked on to contests and other services where they would have to use their cell phones to send SMSs, there is revenue to be made. Initially, this revenue may not be big, but over a period of time as we bring about some further innovations in the marketing, there is sizeable money to be made.

In a small way, all this has begun as we popularise our four-digit (universal access) number, 7827, on the Star channels and also on Radio City.

If the company is looking at exploiting this segment, have you struck up some business agreements with telecom companies?

Oh, yes. We have already concluded deals with some of the major (GSM) service providers like Airtel, Hutch, BPL and Orange. For every SMS sent to 7827 on any network, we'd share 30 per cent of the revenue.

And we are not only looking at just contests where answers are to be SMS-ed to 7827, but a host of services. There can be people's horoscopes available on SMS, weather reports and news too. For example, you want to know about today's exchange rates, all you have to do is send a SMS to 7827 asking for it. We may tie up with some business newspaper or a financial organisation to provide the relevant details.

"What I am trying to impress upon is that as a company, we believe in exploiting new technologies --- we have done that in the past too --- and wireless technology is a perfect example of that"

Is Star India talking to some newspaper organisations to provide news and other such information?

We are holding talks at the moment with a couple of them. I cannot disclose the names because the deals have not been concluded yet. What I am trying to impress upon is that as a company, we believe in exploiting new technologies --- we have done that in the past too --- and wireless technology is a perfect example of that.

What if it doesn't work out like in the case of investments made in several Net companies at the height of the dotcom boom?

Some business ventures click, some are not so hot. You then make sure that the risks are reduced.

Okay, let's talk about the core business of broadcasting. What exactly is happening on that front?

As you can see, we continue to gain in almost all the spheres. In some genres, we may lag behind the market leader, but over a period of time, we'd catch up.

Let's take news and current affairs for example. Star News not only lags behind the market leader, but has also fallen behind NDTV India. Is Star happy with the situation?

News as a business needs to be incubated over a longer period of time. Everybody knows that, and so, we are not overly worried about that aspect. The idea should be to provide a quality product.

"Why cannot all the news channels form a company with equal amount of holding? Infrastruture could be shared, which would reduce a large portion of the costs of running a news channel"

Do you feel that media laws would be liberalised further for Star's liking?

This country needs more foreign investment for which laws need to be liberalised further. It may happen five years later, if not immediately, but it will happen. It is bound to happen. We are ready to wait.

But are you happy with Star News as a laggard?

Of course, nobody would be. But this question should be directed to the ABP Group (the majority Indian partner in the news venture) rather than me. Star is a minority shareholder and we play the role of a minority shareholder. But it must be admitted that ABP is one of the best Indian partners that we could have had and over a period of time, I am sure, the market share of Star News too, would be at par with the others.

But what I am concerned about more is the escalation in the running costs of a news channel, in general. Something would have to be done to arrest the spiralling costs.

How do you see such costs being arrested and kept within limits?

Let's face the fact that the dream run that Aaj Tak had last year would be difficult to match, and repeat, even by it. So, what it boils down to is that an increased number of players will be vying for a limited size ad pie, which is also not increasing the way one would have liked it to.

In such a scenario, news channels need to cut costs and, I am sure that in the case of listed companies like TV Today and others (like NDTV and CNBC-TV18) there would be pressures from investors to do so. A good way to cut costs is to reduce exposure on infrastructure and wage bills.

News channels in India need to share infrastructure, need to form a pool so that costs come down. Why cannot all the news channels form a company with equal amount of holding? Infrastruture could be shared, which would reduce a large portion of the costs of running a news channel.

Have any moves been formally made in this direction?

Not yet. But the time for it has come, I think. It happens in the West even as each channel can have its own exclusives, apart from the routine.

We learn that Star is planning to launch a channel in the news genre, which would not be hard core news?

It's a possibility as segmentation in the news business happens in India. I strongly feel that such a thing would happen here as it has happened in other parts of the world.

If you take Headlines Today as an example, it's a step in that direction. It's not really hardcore news as you see on Aaj Tak or CNN or BBC. It has a lot of variety for softer news items, though, I think, they haven't yet got it right. But over a period of time, the news genre would get segmented into speciality and general news with various variants. Are we bringing out another news channel on those lines? I cannot comment with any amount of finality on that. Still, as addressability gets introduced in India, these things would happen.

"Addressability is an inevitability. When would it happen in India? I cannot say as the issue is being discussed at Trai"

Now, that you have brought about the issue of addressability, when do you think it would finally get implemented as it had faced opposition from the industry itself?

Addressability is an inevitability. When would it happen in India? I cannot say as the issue is being discussed at Trai (Telecom Regulatory Authority of India). But with addressability newer products would get introduced in the Indian market that would form a separate form of revenue and contribute to the overall kitty.

What has been the thinking behind launching new products in the entertainment genre?

It's a flanking strategy. While Star Plus continues to be the flagship and brings in a major portion of the revenue, there are certain gaps that need to be plugged and addressed. Star Utsav and Star One, that is slated for an October launch, is aimed in that direction. While Star Utsav as a free to air channel, airing mostly re-runs, we would try taking away some revenue from the likes of SAB TV and Sahara (Manoranjan), Star One is targeted at the more upwardly mobile audience where people don't mind speaking Hindi, but are very comfortable in English.

Take, Star Utsav's case, for instance. It's a channel that has cost Star India something around just a million dollars to put together, including the transponder cost. But, on the other hand, it offers an opportunity. Even if I don't sell airtime on prime time, which again can be redefined, at Rs125,000/10 seconds, I stand to rake in money. Let's say, our ad sales guy goes and sells a ten seconder for just Rs 50,000, or maybe even less, we'd start making profits towards the end of the first year. And all this without even touching the afternoon or the early evening band.

What would be the format for the channel that is going to debut in October?

Star One is primarily targeted at, as I said, the metro audience. The Dil Chahta Hai crowd, which would go to see such a movie, but also love gizmos, cars, etc. I did some dipstick surveys and found that while Star Plus does deliver the eyeballs, the profile of the audience does not attract all types of advertisers. For example, I found that auto companies do not prefer Star Plus because of the type of the audience that comes on to that channel.

So, how do we attract the auto companies and the likes of them? We have to come up with programming that would be watched by an audience whose profile would attract the car companies too. Though the language would be Hindi on Star One, it'd be zippy. It'll have sitcoms, talk shows, holiday getaways, gizmo talk, etc. But it's not a lifestyle channel. If I have to give you a global example, it'd have programmes on the lines of a Jay Leno Show, for instance.

If Star Plus is giving the company the base (advertisers and audience), through Star One, we would like to tap the upper middle segment.

What is the revenue that Star is expected to roll in by the time the financial year ends on 30 June?

Cannot reveal the figures, but the bottomline looks healthy.

Have you all the clearances for the DTH project in place?

We are just minority shareholders. You'll have to ask the Tatas about the status.

When is Star making forays into the South Indian market?

We definitely want to make a foray there, but the big question is how do we do that? There are several options before us, including partnering with an Indian company, partnering with an South Indian company or also going ahead and developing Vijay TV. I think by the end of this calendar year, we would have taken a call on the option that we would exercise.

Where do you see Star India five years from now?

Continuing to rule the airwaves, but with a host of services targeted at various segments of the market. The Indian market by then would have matured further where more convergence would have come about.

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