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Tuesday , July 19 , 2011
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Multiple brands may guard Murdoch's India biz: Experts

New Delhi, July 19 (PTI): Rupert Murdoch-led News Corp's strategy to operate under multiple brands may help the group shield its Indian businesses from any possible fallout of the crisis engulfing the group in the UK and US, experts say.

The media conglomerate, which owns assets worth USD 66 billion (about Rs 3 lakh crore) across the world, has a significant presence in India, including in the television content and distribution, publishing, films and news businesses.

However, the experts believe that the Indian businesses may remain insulated from the phone hacking and police bribery scandals that have pushed the group into a deep crisis in its key Western markets.

The Indian business might be affected only if the group's world-wide business comes under the scanner, they added.

The group operates most of its businesses in India through Star India Pvt Ltd, a wholly owned subsidiary of US-listed News Corporation.

Its portfolio here includes about three dozen general entertainment channels and three news channels including Star News. The Indian business has been a key contributor to its global TV advertising revenues.

The group's TV channels are mostly operated under the Star brand in the country, while the Fox brand is used for films, Harper Collins for publication, Sky for satellite TV distribution and Dow Jones for financial market information services.

While the queries sent to Star India remained unanswered, media buyers and planners said that a layman here may not even know that the Star TV channels in India were owned by Murdoch.

”I don't think it will have any impact on his India business. His India business is strong and growing and mainly focused on entertainment,” Madison World Chairman and MD Sam Balsara said.

”People from the media and advertising industry are aware of the crisis, but the phone hacking controversy will not have any impact on routine operations here. Nothing will change for him here,” another media advertising executive said.

Rupert Murdoch himself has described the group's Indian business as a “next generation” prospect.

A few months ago in March this year, during his visit to India, his son James Murdoch had also rued regulatory bottlenecks in the country, but promised to continue to invest in India as a priority market.

On his part, Murdoch Sr said in News Corp's last annual report for the year 2010 that Star India was being developed as a “next generation” business by the group and also as a ”hedge against uncertainty” in other segments.

Much before the ongoing crisis broke out, he said that business as large as his group was “no stranger to adversity or to instability.”

”We hedge against uncertainty by investing in diversified assets at all stages of growth. So as we strengthen our existing businesses, we are developing the next generation, like STAR India and new digital content models,” Murdoch Sr said.

Robust advertising revenue growth from the Indian TV business has consistently found a mention in News Corp's annual and quarterly results for many years and the same was acknowledged by Murdoch also.

”STAR India saw particularly robust advertising growth and we continue to develop market-leading capabilities in that important and burgeoning region,” he has said.

The group's international cable operation revenues rose 18 per cent in 2010, primarily due to higher advertising revenues at STAR and higher advertising revenues at STAR was ”primarily due to the strengthening of the advertising market in India.”

India could be a key market: Experts

Future Brands Managing Director and CEO Santosh Desai, who keenly watches the advertising market in the country, said that Murdoch can in fact derive a certain amount of comfort in India as “he is not the face of the businesses he has in the country, unlike in the West.”

”His company also does not have a significant presence in the news segment. Especially in print media, his company does not even have any direct presence,” he added.

Murdoch's group publication, Wall Street Journal, has a content-related partnership with the Indian business daily Mint, while Dow Jones Newswires has a small presence.

”Since Murdoch's role in India and the level of engagement is of a different order compared to the UK or the US, there will not be any significant impact of the ongoing phone hacking issue here,” Desai added.

He, however, cautioned that if “his businesses worldwide come under a scanner, then there is a remote chance of the Indian operations also feeling an impact.”

In January, 2009, News Corp formed a venture with Asianet TV to launch general entertainment channels in southern India.

It paid about USD 235 million in cash and assumed net debt of USD 20 million for a controlling interest in four of Asianet's channels. In July, 2010, News Corp paid a further USD 90 million to increase its stake in this venture to 75 per cent.

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