'Overall news market's growth will come through regional expansion' : Uday Shankar - Media Content & Communications Services India Pvt. Ltd CEO

A few days ago, Star News completed three years of operation under a new regime after the divorce from its long-standing content partner, NDTV, which has gone ahead since then to launch its own news channels.

The man at the helm for two of those three years is Media Content & Communications Services India Pvt. LTD (manages the Hindi news channel Star News and the Bengali news channel --Star Ananda) CEO Uday Shankar, who is also credited with taking Star News to the position of strength it enjoys today from a rather weak number four that it was two years ago

Shankar, who was earlier news director of Aaj Tak, the country's most successful Hindi news channel in terms of market share, spoke to's Anjan Mitra about the journey thus far and the challenges that lie ahead.

How do you view these years of Star News?

These three years have been extremely satisfying for the company inspite of the many roadblocks and problems that we have faced, including problems like satisfying the government on joint venture partners and initial distribution glitches. Despite that, I can say MCCS has done well in the Hindi news market and the other Indian language market where we launched a Bengali news channel, which has become a benchmark for quality content in the regional language television market. Our performance has also shown that quality product can be offered to consumers and will be appreciated in the non-Hindi and non-English markets, which carried the perception of low-quality products done on low budgets.

At MCCS we also believe that the potential of non-Hindi --- and also in some niche segments of the Hindi market --- is enormous. Companies who ignore the regional market do it at their own peril. For example, the Bengali news segment was considered extremely sluggish, but in Star Ananda's short existence of eight months till now, we are seeing two new news channels already in this particular segment.

In the Hindi news market, we have done pretty well with Star News as the first year was marked by regulatory uncertainties and fighting for a suitable place on cable networks that are choking with increasing number of channels on offer, squeezing the limited bandwidth available with cable operators. We have put all these behind us now and consider ourselves the strongest contender for the No. 1 slot in the Hindi news space.

If the market leader Aaj Tak has been bested at all on occasions, it was done by Star News. This is certainly a reason for satisfaction. These three years have been eventful at MCCS, but we still have a long way to go before we can truly claim to have lived up to the impressive goals set by the two parents, ABP group and Star.

Is MCCS with its two channels, Star News and Star Ananda, making business sense to its two shareholders ?

Without giving you financial details, I can say on the commercial side we have also done well. For example, we have set in place a transparent system for selling air time in the Hindi news segment. Not many players do that or have the guts to insist on selling ad space on pre-defined rack rates. What's satisfying is that the market has accepted and appreciated this transparent method.

Today the unit value of (air time) on Star News is as lucrative for the company as it is competitive vis-a-vis other news channels.

(Though Shankar was mum on vital statistics, information collated from industry sources indicate that Star News, for one, has shown 70-75 per cent growth in revenues, primarily coming from advertising, in FY 2006 as compared to the previous year. It is also being said that MCCS might clock a small operating profit when the financial books are formally closed for the fiscal ended 31 March 2006.)

When one watches Star News now, there seems to be a sea shift in content focus. Was this change necessitated out of business reasons?

There was a problem with the perception, I agree. The perception amongst viewers that Star News was a channel that focused on soft stories, features and lifestyle has changed. We have gone and done some of the most hard-hitting stories, including reports on corruption amongst parliamentarians and politicians and taken up issues that affect society at large.

What is really satisfying as the editor of Star News is also that we have started setting the news agenda both in terms of nature of programming and selection of news and its presentation on a daily basis.

When did this realization dawn on MCCS that an earlier envisaged profile of Star News of catering to the non-political viewers was not doing the trick?

I wouldn't say the realization came overnight. When a news channel is launched in a market that was severely stirring up with the launch of several other news channels, then many permutations and combinations are tried out, which are part of an evolution process.

I think with Star News also went through that evolutionary phase. At a time when many products were mushrooming all over, a certain niche profile was sought to be given to Star News. It was done to have a better differentiation. Star News started off (in its new avatar three years back) by positioning itself as a big city news channel catering primarily to viewers in the upper income bracket. That made sense also at that point of time in the Hindi news segment as the company was trying to leverage an earlier image of Star News, which was an English dominant news channel meant for the city slickers.

After having said that, I must add every channel --- news or otherwise --- does content corrections mid-way on a dynamic basis. Star News is no exception to this general rule of broadcasting. Rather than dubbing the changes as 'realisation', I would term them as an evolutionary phase.

When I came on board MCCS and Star News two years back (February 2004), I came with my own set of ideas as to what the Hindi news market is and what sort of viewers should be tapped through which type of programming. We tried out some of those theories and I must say quite a few have proved to be successful too. So, we are still trying out things. More so because the need of the viewer is also changing constantly and we have to keep pace with that.

'With so many news products being launched, everybody seems to be in a hurry sans any content focus or an eye for other details'

Do you mean to say that to be successful with a Hindi news channel, you have to aggressively target the viewers in the smaller cities and towns, giving them their daily feed of local news?

I don't see how you can avoid doing that. Simply because to create an impact editorially and financially, one has to have the numbers. For that a Hindi news channel has to go to the masses, apart from servicing the needs of upper (income) classes of society too. To create the right impact, I don't see a Hindi news channel surviving without having a wide reach amongst the masses.

Today I can say that we have managed to connect with the people irrespective of the part of the country they lived in and as long as they understood Hindi.

Has this connection with the people resulted in good revenue growth or it's languishing in the low-end double digits?

I cannot go into the specifics, but the growth rate is not languishing.

Taking you on your face value that Star News has settled down now, what's the strategy to take it forward and drive up ad sales?

The ad sales strategy of Star News cannot be divorced from the game plan of other news channels as we all operate in the same arena. Now that's a disappointing area because the ad sales strategy of news as a whole is disappointing, to say the least.

What makes you say so and cast a doubt on competition's strategy?

I see a clear lack of purpose (in having a definite strategy for selling news). The general theme in the news market is channels go to advertisers and ask for whatever money that can be put on the table in return for all-encompassing access. That is an attitude which irritates me. I don't see such fawning in the general entertainment space where despite the huge gap between the leader and others, everybody follows certain basic rules governed by cause and effect. I don't see that happening in the news market.

With so many news products being launched, everybody seems to be in a hurry sans any content focus or an eye for other details. Most people do exactly the same kind of programming that others are doing and would do in future. I see a huge problem there because advertisers are able to play this factor against one another. More the number of news channel, sharper and deeper would be the fragmentation of the news market. As a result of that, I see many news companies responding desperately with less logic and strategy for the long term.

This living-for-today approach of the news players is not doing the industry any good. Nobody is giving an iota of thought on other important issues like increasing the market share of news, which is still a minuscule five to six per cent of the total TV universe.

Since it's easier to preach, has MCCS done anything to address some of the broader concerns being raised by you? There has been no attempt by the news broadcasters in trying to alleviate content and other aspects of the business in the last few years. There has been no attempt to draw the best talent available to the editorial or business segments. I see some of these as matters of concern.

However, Star News' strategy cannot be totally independent of the general industry norms. We are as much a culprit as a victim of the news market environment. The kind of scenario that prevails in the news business is not akin to that of the entertainment segment where Star Plus is the dominant player and can dictate terms up to an extent. Nor is the situation like in the print business where Times of India and some of the regional players are dominant.

The television news business is in a peculiar situation where a collection of news channels are dominant instead of a clear numero uno that is miles ahead of its rivals. Star News, Aaj Tak and the TV18 and NDTV groups together form a formidable bunch. But it is also important for these players to get together in the Hindi and English news segments to formulate certain benchmarks in terms of editorial coverage and revenue generation, which should be followed by all of us. Irrespective of the fact whether such a collective move hurts some of us in the short term or not. However, that's not happening.

In order to take television news to level two, a certain set of norms relating to manpower, for example, is needed. Because in the earlier phase the likes of Prannoy Roy, Raghav Behl and Aroon Purie were able to attract good talented people, their businesses have turned out to be successful. But now the same set of people is seen on a cyclical basis on various news channels. Where's the new talent? And, naturally, fresh ideas will also not come. I think, news broadcasters need to do sustained investment in training, apart from programming.

The elder statesmen of the of the news business like Prannoy Roy, Aroon Purie and even Aveek Sarkar (of the ABP group) are seized of such issues. They too are worried, but what's worrying for me is that these concerns don't seem to get reflected at the operational levels.

May be I am sounding impatient at this point of time, but as a part of the TV news business, which has the potential of growing, I am also worried that no concrete steps are being taken to address the concerns of the industry.

What innovative steps has MCCS taken towards doing business in the news space, since you are so critical of others?

With the change in management there has to be changes at MCCS too. I also agree there were some issues earlier, which have been ironed out more or less. However, what is more significant is that for any substantive changes in the approach to revenue generation, the news industry needs to respond collectively. Isn't it a crime that almost all the news channels are paying hefty carriage fee and almost 15-22 per cent of the annual budget is spent on distribution-related matters?

How do you plan to take Star News, if not the whole industry, to the next level where the aim would be to expand the news universe?

Like everybody else, Star News will have to work on its content more. While we have done some interesting things with the content in the last 18-24 months, I feel there's still more to be done. There's not enough relationship-building happening with the viewers. I believe that people should look at news as an instrument to improve their quality of lives and their immediate environment. That would be a priority at Star News this year. We have already launched a small initiative in this regard --- khabar hamari, faisla aapka (we report; the viewers rate them). People's verdict and judgment need to be integrated with news in a big way and this would be our guiding philosophy in 2006.

We'd also explore the unconventional genres of programming to attract those segments of viewers who are still not properly hooked to news viewing --- the youth, women, professionals. Star News was the first general news channel to put up a programming on personal finance, considered the prerogative of business news channels. But it has done well on Star News.

As content providers and generators we'd also look at various forms of delivery. DTH is one such area that will help in expanding television viewership in this country. Poised to take off in India, DTH will also help MCCS formulate niche programming for niche audiences.

Why do you say DTH is poised to take off? Subhash Chandra's Dish TV is already here and expanding and why couldn't Star News take advantage of the medium so far?

We had our internal issues to settle, which have been taken care of now. We were also busy on the sprucing up the content that did not give us enough time to concentrate on various delivery platforms. But now we think we are prepared to look at DTH as a medium to reach out to people in remote corners of the country.

Or, is it that Star News was waiting for the Tata Sky to start its DTH service and not give an advantage to a competing DTH platform?

Not really. I feel DTH in this country hasn't really taken off. Action will start happening when more players come in as the media has reported.

Are you saying that Dish TV has not performed well?

I am not saying anything of that sort. I am also not in a position to judge their level of success.

What are MCCS' plans to make more regional forays?

We are very excited about the prospects of the regional and niche markets. The current size of the total news market (approximately Rs. 6 billion) is definitely not an indicator of the potential. I believe in a country like India --- with its diversity, present social mood and economic growth --- news market has the potential of growing exponentially. And a major route for growth would be through the regional market, which , at present, is hemmed in by limited delivery platforms and lack of adequate infrastructure. The cost of distributing a channel is becoming so prohibitive that it's restricting viewership expansion. That's why, I am excited about DTH.

You still haven't answered my question. What are your company's plans for regional forays?

We do have plans to look aggressively at the regional market. But it would be premature to talk about them now. Give us some time.

So, would we see some new products from the Star News stable over the next one year?

I am not ruling that out anything. Regional market is a highly aggressive one, which is going through a growth phase. I cannot imagine MCCS not growing in that space for the next one year.

The shareholders of MCCS are committed to do news and we'd do that. We are still exploring in which of the regional languages and in what format we would like to move ahead.

Would MCCS make a South Indian foray or does it think existing players there are too strong to be taken on?

Whether MCCS would make a foray into the South Indian market or not would have to be decided by the two shareholders --- Star and the ABP Group. Since Star already has Vijay TV in that market, any decision to move into a new market would have to be decided by the shareholders.

Though there are rumours of friction between the two shareholders, how confident are you of funding for growth?

I have the assurances of both the shareholders that whatever funds are needed to pitch MCCS as a dominant player in the news business would be made available.

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