Last year was a tough one for most networks. One of the honourable exceptions of course was Star India and it enters 2002 the clear leader not only in terms of viewership but also having commandeered the largest chunk of advertising. That advertising costs more now what with reports stating that rates for the network have been increased by an average of 30 per cent effective 1 January.
Raj Nayak, executive V-P sales & marketing, and the man pushing ad sales for the channel, spoke to Thomas Abraham outlining the measures Star was adopting to keep its rivals at bay. And grab an even bigger piece of the ad pie.
Zee & Sony have announced that they will not be doing any more CPRP (cost per rating point) deals. What do you have to say about this?
In fact I was surprised when they decided to do CPRP-led deals. I even told my friends at both Zee and Sony that they were making a mistake and shooting themselves in the foot. Given the current market dynamics there was no way they would be able to service the inventory and it was a downward spiral. It was a very short term measure, not a well thought of or planned strategy, but more out of desperation to mop up ad revenue in a depressed and competitive market.
But isn't that the way business is done internationally?
Yes and no. It all depends on market dynamics. As long as there is a major gap between the market leader and its nearest competitor it will be the market leader that will set the agenda on how the market will operate. This is true for any industry including the print media. It is also a matter of supply and demand. In my opinion the market is still not mature and it will take at least another three to four years before a set buying pattern emerges.
'At Star we do not sell ratings, we sell results.'
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According to media planners, besides doing CPRP deals Zee and Sony also dropped their rates, thereby giving Star a tough time in the marketplace especially since Star had increased its advertising rates?
All I can say is they tried very hard, but ended up earning the same amount of revenue for four times the airtime sold. It did slow down the process for us a little but really had no impact on our business. Like I have said before, at Star we do not sell ratings, we sell results. This business has also a lot to do with relationships and our relationships with our clients are extremely strong. We are very clear in our minds that our success is linked to the growth of our advertisers, so we work very closely with them to achieve the desired objective and give them the bang for their buck.
When do you expect to have fisticuffs for the advertising rupee from your rivals? What kind of lead time do you have? How are you preparing for the time when the tide will turn? A couple of Sony's shows are already showing results.
Even today, we have to fight very hard for every advertising rupee. However, most of the deals we have with our clients are long term and for a minimum period of six months to a year. So to that extent our revenue base is protected over the financial year. Like I said earlier, our relationship with our clients is based on the results we deliver and not just on ratings. So a little tweak in ratings here and there does not really affect our immediate business plans.
How do you plan advertising rates for a show at debut whose performance you have no inkling of? Do you sell the environment around the show, the potential audiences?
Advertising rates are planned based on the cost of production, the premium slot on which the programme is scheduled and expected performance. From the advertisers point of view, he gets to see a copy of the pilot tape and he also takes a decision based on gut feel. The advantage of sponsoring new shows also means association with all the promotion that goes with it.
How do you react if the show does not deliver on these commitments? Do you go for course corrections? Can you illustrate with examples?
Most of the advertisers on the Star Network do not buy a programme in isolation but a complete package. And most often, the overall buy balances out. However, if there is something drastically wrong, we work closely with advertisers to make sure that their campaign objectives are not lost.
Does ad sales work very closely with programming and marketing? Can you illustrate?
At Star, everything is team work. Programming, marketing, ad sales, every department work closely with each other where we discuss ideas, market feedback and course correction. At the same time, we have clearly demarcated our functional areas so that we do not infringe on others' objectives.
There are some opinions in the market that the strategy of selling the channel as a network has not really paid the dividends that were envisioned. Hasn't Star Plus' value proposition devalued somewhat without really bringing in the returns that justifies its pre-eminent position in the channel stakes?
The Network Strategy on the contrary has worked extremely well for us. We now have clients on the network who otherwise would have advertised only on Star Plus. The strategy was to leverage the strength of the Network and its lead channel to get advertisers to sample the whole bouquet and see the results for themselves. That objective having been achieved, we are now also focussing on individual channels and genres.
Will you be continuing with the network selling proposition or is there any possibility that you may look at pushing channels individually, or at least reduce the discounting that accrues when the network channels are bundled according to the various permutations that you have set up.
There is no fixed rule as such. We shall do whatever is right for a given situation. The brief I have is very clear, that is to increase brand counts and maximise revenue which I think my team is doing quite effectively.
'Besides we will also package and market television events like the assembly elections, budget.'
Who are the major sponsors and advertisers of the Star Network? What arrangement does the Star Network have with them?
Anybody and everybody who advertises on the Star network is our major sponsor. We do not differentiate a client by their spends . We at Star advertising sales believe that we are in the repeat order business and the only arrangement we have with our advertisers is to ensure that we deliver value, so that they come back and spend monies on our Network, again and again.
What value proposition do you offer to advertisers for each of the channels in the network and the entire network? How closely do you work with advertisers? Can you illustrate?
The biggest value proposition to our advertisers is that we are a one-stop shop, reasonably priced giving value for money and an excellent environment.
Why should advertisers come to Star when cheaper options are available? GRPs is the way to go - with these outlets, is what advertisers say...
No other Network offers you the environment, the content, the packaging and the services that we at Star offer. The fact we have continued to do business over the last 10 years without guaranteeing ratings and managed to grow our advertising base year on year is enough proof that our clients are happy with the results we deliver.
Discounting is rampant today... How will you ensure Star does not fall into that trap?
The market today works like a stock market. There are no fixed rules and rates are dependent upon supply and demand. However, it is a question as to what extent you are willing to discount, because beyond a certain level it becomes an unviable proposition for any network that works on a fixed inventory. This is where the brand value of Star and relationships play an important role.
How significant has the Star News revenue jump been post-11 September?
We have a very consistent advertiser base on Star News, and there has been no dramatic changes post-September 11. Also it is a channel policy not to encash on any disasters.
'We believe [V] Popstars will be the turning point for the channel.'
Star News still has the advantage of being the leader on the ad revenue front. Any special strategies to make sure this situation is not overturned?
The quality of our news coverage and the environment we provide to our advertisers, is something that we will continue to focus on. Besides we will also package and market television events like the assembly elections, budget, etc.
What about Channel [V]? While there is a lot of activity around [V] Popstars it is still MTV and B4U Music that have higher viewer recall. What plans does the group have to increase the visibility of the channel both in terms of marketing and content?
[V] Popstars has just been launched. The auditions are still going on and the response we have received so far from the participants and the sponsors has been overwhelming. The programme will only go to air in the third week of this month. I think we should wait for that to happen before coming to any conclusion. We believe this programme will be the turning point for the channel. Besides Popstars there are a whole lot of other new programming initiatives the channel has launched and the feedback so far has been positive.
With which Hollywood companies have you tied up to bag the rights of movies?
Disney, Polygram, 20th Century Fox, MGM, Hollywood Pictures, Miramax, United Artists, Dreamworks, Studio Canal (New), Touchstone, besides others.
What are the big titles that you have lined up for 2002. AXN bought Crouching Tiger Hidden Dragon as one of its biggest properties at the end of last year while HBO has splurged on Mummy as its beginning of the year offering. HBO is planning some major activity around Valentine's day (February) and the Oscars (March). Any such in store from Star Movies?
Yes definitely. Whilst HBO is planning major activity around the Oscars, we are focussing on showing a month full of Oscar nominated movies culminating into the grand finale where Star Movies will telecast the Oscar ceremony itself Live to our viewers. Besides this, we also have great lineup of movies like American Beauty, Enemy Of The State, Jerry Maguire, What Lies Beneath, X-Men, Jurassic Park, Forrest Gump, etc. this season.
What about Star World? The channel after creating a huge impact, somehow lost its identity and Zee English seems to have picked up.
Star World has a very loyal and a very niche audience. The content on the channel is excellent with programmes like Chicago Hope, Practice, Alley McBeal and lots more. We have just put Rendevous With Simi Garewal and that's doing quite well.
'No air time is given as gratis on Star Gold and the channel is attracting advertising on its own merit.'
Star Gold seems to be a real problem. It is great that the effort is made to keep public tuned to movies from the old era. But there is a view that it is almost a "public service" proposition. What is the ad positioning strategy or will it continue to remain a channel where advertisers are given air time gratis for buying time on the other channels?
Star Gold is not a problem at all. In fact, the channel is picking up in the Hindi belt and for the first time since its launch, now figures in the Top 20 list amongst C & S channels. As regards the advertising revenue strategy, I would like to clarify that no air time is given as gratis on Star Gold and the channel is attracting advertising on its own merit.
Starting with Star Sports, your portfolio was expanded to include niche, news, and entertainment channels, and finally the entire network. What has helped you live up to the challenges hurled your way?
Conviction and courage to experiment. And more importantly, the strength of a dedicated and passionate team. I work for an organisation that gives you the freedom to be an entrepreneur within a structured framework. This has allowed me to take risks and move away from conventional buying and selling. In corporate life, you are only as good as your management allows you to be and thankfully, I have always been lucky.
What is your next priority?
My immediate priority is to ensure the objectives that we have set for ourselves in Star for this fiscal are met. In the current market scenario, we need to think about "now". Tomorrow is another day.
