The man who turned Star India around believes that the company, as a leader, can't grow if things don't improve within the broadcasting ecosystem
Uday Shankar had always been a news editor. When this former political reporter and economic history graduate became chief executive officer (CEO) of an ailing Star India in 2007, most people in the industry, including yours truly, were sceptical. Sure, he had created Aaj Tak and had run Media Content and Communications Services (MCCS) – the holding company for (the former) Star News – as CEO. But could he take charge of a multi-million dollar entertainment company? It was thought that he would not last long. In his fifth year as CEO, Mr Shankar – who will turn 50 this year – has proven everybody spectacularly wrong, writes Vanita Kohli-Khandekar.
Not only has Star bounced back to become India’s largest broadcast network in terms of audience share and revenues (“The star is born, once again,” June 12), it has also achieved something that took Unilever, Procter & Gamble and other multi-national corporations (MNCs) decades. It has shed the tag of a foreign company, becoming seen as an Indian firm, as much part of the media and entertainment business as Zee, Sun or Eenadu.
As I enter Mr Shankar’s office in Mumbai, I am curious to know how an editor “type” navigated the perilous business territory between New York, Hong Kong and India. It is an office I have visited often over the last decade to meet Peter Mukerjea, one of Mr Shankar’s predecessors. It holds memories of conversations about Star, and I look around nostalgically. Mr Shankar orders my black tea and his regular one and the present takes over.
The Rs 3,700-crore Star is a subsidiary of the $34-billion News Corporation that is controlled by the inimitable Rupert Murdoch. Mr Murdoch’s reputation and News Corporation’s aggression has meant that Star suffered more from being foreign than Sony, Disney or any other media company. At one point, before Mr Shankar came in, the idea of an Indian listing was also considered. It would help create transparency and lots of local stakeholders. This would allay any suspicions about Star’s intentions.
How did this perception change? Has Indianising the company been a conscious decision or is it something that just happened? Mr Shankar, who is sipping his tea, is startled by the question: “It happened [being branded as foreign] because the management took Brahminical pride in being more like an MNC. That legacy caused huge problems for the company and rivals were only too glad to point it out and use it for politicking. The fact is that nobody can have a greater claim to being Indian than a company that produces more Indian content than Bollywood,” he says.
This a point with which international analysts will agree, albeit painfully. For those who came in late, News Corporation had paid $825 million to buy Star TV from Hutchison Whampoa between 1993 and 1995. Soon, China had swallowed up a billion dollars. And India was a dead end thanks to an agreement with joint-venture partner Zee that limited what Star could do in Hindi. By the late nineties, Star TV looked like a bad bet and analysts worldwide were downgrading News Corporation’s stock.
In 1999, Star and Zee broke up. Star, then, launched Kaun Banega Crorepati and other Hindi shows that dominated the charts for more than six years. Soon, it was bringing in one per cent of the News Corporation’s global revenues (over two per cent now). This was the first time the Indian media market was showcased to the world — and it looked good. Every major foreign broadcaster started upping their India spends.
But Star’s aggressive hold over the broadcast business came at a cost. It was made to reduce its holding in FM radio. Direct-to-home (DTH) broadcasting was blocked for years after Star advertised in the late ‘90s that it would launch a service that circumvented cable. Several policies were changed overnight to curtail the rising power of what was seen as a “foreign broadcaster”, in spite of all the saas-bahu serials it aired.
After Mr Shankar joined, Star started identifying the concerns of Indian media companies, enhancing its “Indian” identity and ensuring that the government or regulator was never suspicious of its agenda. “One of the things I have worked on is repairing Star’s relationship with all stakeholders — whether they are cable operators, regulators or rivals like Zee,” he says.
For example, Star is a part of the Indian Broadcasting Foundation (IBF) and Mr Shankar, as its president, has spent a lot of time and effort lobbying for digitisation that will help improve the ecosystem of the Rs 33,000-crore TV broadcasting industry. He believes that if issues within the system, whether revenue leakages or poor programming standards, do not improve, Star as a leader cannot grow. Much of the work he does in IBF will benefit Star. But it will also benefit its rivals with whom he has spent an inordinate amount of time building bridges.
His equation with Zee CEO Punit Goenka is what led to the formation of a distribution joint-venture between the two companies last year. Nevertheless, Star, under Mr Shankar, has chosen to operate largely independently — getting out of a series of joint ventures with Balaji Telefilms, Hathway Cable and, more recently, ESPN.
What about the “News Corporation style”? Did it bother the editor in him? Mr Shankar answers without a pause: “People don’t realise what a federal structure we [News Corporation] work in. If I take a concept to New York, it is because I am not sure or because I need money. Also, remember that News Corporation puts a lot of emphasis on content. Many of its journalists become CEOs. When Star News became number one, one of the first mails I got was from Rupert.” That probably was also when Mr Shankar came onto New York’s radar.
When things were spiralling out of control at Star India in 2006, the then News Corporation COO, Peter Chernin, on a visit to India, asked him what he thought was going wrong. Mr Shankar, who was then MCCS CEO, gave Mr Chernin his unedited opinion. Soon he was called to Hong Kong and, to his surprise, asked to take over.
His big takeaway? “As CEO you should not pretend to be what you are not. As a content person, I have realised that the way people connect to content is the same for news or entertainment,” he says. Mr Shankar had walked into Star without ever having watched a soap opera, and he admitted it. “I met the content team and told them that I don’t know anything about programming. But I have one skill, asking the right questions. And I will use that to solve this problem [of Star’s falling popularity],” he says.
Some of the problems were obvious. Star and other broadcasters had overdone the kitchen politics and metro-oriented programming. Cable and satellite had spread to small towns and rural India but Star was not capturing that audience. Some problems were less obvious. “The place was frozen, people were living in denial,” says Mr Shankar.
One of the first things he did was sever ties with Balaji. That signalled the beginning of a transition that is still going on. Several experiments later, came a slew of shows that resonate better — Satyamev Jayate or Saathiya. Plus there is this pan-India focus, not just geographically but with new channels such as Life OK that target segments of the Hindi audience. And there is the regional push. From five per cent, Star now makes over one-fourth of its revenues from languages other than Hindi and English, making it the only national broadcaster of size after Zee.
The perceptual and material Indianisation of Star is almost complete. This former news editor can relax, for a bit.