Rediff.com  » Business » Of James Murdoch, Star and return of a heir

Of James Murdoch, Star and return of a heir

By Vanita Kohli-Khandekar
July 16, 2008 12:07 IST
Get Rediff News in your Inbox:

There are a few people in the media business, whose careers I have been tracking since they started. James Murdoch is one of them. His second coming, as the head of India's second largest media company, Star, is more than just interesting. It will change the nature of competition in the Rs 20,000-odd-crore Indian television broadcasting business.

First the facts. The $389-million Star India is a subsidiary of Hong Kong-based Star Group, which in turn is owned by the $32-billion, New York-based News Corporation, noted more for its charismatic chairman, Rupert Murdoch (James' father).

About six months back, News Corp anointed James as the head of Europe and Asia. That effectively puts India, by far News Corp's largest business in Asia, under Murdoch junior.

Why does he matter? The first time he took charge of Star in 2000, James put India on the global media map. What he does to get Star out of its rut interests me and I am sure many others in the industry.

In the 1990s, Murdoch senior had spent $825 million to buy the only company broadcasting into China and India -- dream markets then. By 2000, China alone had swallowed up a billion dollars without any signs of a return. Analysts across the world had started doubting Murdoch's Midas touch.

That is when the maverick in the family was packed off to Hong Kong. By the time James left in 2003, Star India was the most profitable business in News Corp's Asian portfolio. It was well on its way to becoming the largest media company in the country after Bennett, Coleman & Co. (It did not).

In the process, James Murdoch grew up. From a Harvard drop-out who set up his own music label, he became a surprise potential successor to the News Corp throne. Till then only elder brother Lachlan had been in the reckoning. James went on to head BSkyB, one of UK's top pay TV brands.

While analysts quibbled then about 'nepotism,' he proved himself once again. This time so conclusively that in December 2007 there was hardly a murmur when he was put in charge of key News Corp assets -- SkyItalia, News International and Star.

India however is a different market from the one a 27-year old James saw in 2000 -- it is bigger and has fiercer competition, thanks in part to what he did. Star India's eight-year old dominance of the Indian television broadcasting market is shaky.

James is fighting two of his former lieutenants -- Peter Mukerjea of INX and Sameer Nair of NDTV Imagine. In addition there is Colors, the Viacom-Network18 general entertainment channel headed by another former Star executive, Rajesh Kamat. Zee is on a very strong wicket and Sony hangs on; even as entertainment's share in television viewing declines.

News Corp's management mistakes undid a lot of what James and his team had achieved. After showcasing the possibilities of the market to the world, triggering the entry of a few million dollars of investments, News Corp got stuck.
Both, its regional office in Hong Kong and the head-office in New York, were reluctant to accommodate the ambitions of its successful team. Instead of investing in other businesses (print, DTH, IPTV, outdoor, films) or expanding its footprint (languages), it kept pushing a bunch of potential CEOs to squeeze more out of what was essentially a one-channel success.

The resultant politics, the viewership and revenues slip and finally the breaking up of the team was, in hindsight, inevitable. 

This perhaps is News Corp's most serious attempt at undoing the damage. This time it is not parking the chairman's son at the Asian outpost, but sending one of its best generals out to battle. All of James' learning of the last eight years will be put to test.

The first thing he probably will do is push for all the growth initiatives that had been put on the backburner. So language channels, films and television software are some of the areas where you will see action from Star in the coming months.

My bet is acquisitions will be big on its agenda. Having Paul Aiello, a former investment banker as Asia CEO, is not coincidental.

When Star had nothing to lose, it bet on a fading superstar and a game show called Kaun Banega Crorepati. This time too, there will be that one big thing that James will bet on. Look out for that.

The author is a media consultant and author of The Indian Media Business.

Get Rediff News in your Inbox:
Vanita Kohli-Khandekar
Source: source
SHARE THIS STORY