 "STAR India goes in for top-level rejig, elevates Uday Shankar")
Star India, one of India's largest media firms, has reorganised itself. The network, with over 40 channels, is now broken into different units with separate chief executive officers (CEOs). According to estimates, Star India should close its financial year in June with Rs 10,500 crore in revenue. Uday Shankar, now chairman and chief executive officer of Star India, speaks to Vanita Kohli-Khandekar, about the company's growth in both sports and entertainment segments. Edited excerpts.
What is the rationale behind the restructuring?
The question first popped up when we went into sports, a completely different business. Till then, we were largely an entertainment network. Sports is about seasonal spikes, whereas the entertainment business is about building consistent audiences. Then we did Hotstar (its video app), where we had the same problem. It was a completely different business - lot of youngsters, very tech-heavy, bohemian.
The reason Star has grown is because we worked well as a close-knit team. Everybody is very capable, all aligned on strategy. For the first five-six years after I took over (in 2007), things were simple. New York (where the parent company the $29 billion 21st Century Fox is located), set the agenda and the operating targets, and I ran the business. We were a large company but it was mostly about Star Plus and a few other channels, and I was running it totally from the front. Whatever we wanted to do - sports, regional or Hotstar - we invested in high-quality talent and grew the business. When I joined, we had a team of 1,100 people (Editor's note - about Rs 1,600 crore in revenues). Today, there are 4,000 full timers. And, increasingly, I feel it is not possible to run with the same approach because of the complexity and size of the business, and because it is not fair to the large number of capable people we have. We need to give space to the entrepreneurial spirit of the organisation and ensure it is not held back by its weight and size.
What are you hoping to achieve through this restructuring?
One, to cascade leadership two-three levels down. As each chief executive officer runs his own business, they will create their own teams and would widen the pool of talent. Two, the vision inputs become more diverse. So far ,the job of thinking has revolved around me and a few others. Three, to take multiple growth initiatives in parallel. We have always done only one major initiative at a time. Now, we don't have the luxury of doing things sequentially.
What is the idea behind an in-house content studio? Is it a production arm?
India has this unique model, where a successful series has to run into hundreds, if not thousand, episodes. The downside is that the guy who develops the show doesn't have the bandwidth to think beyond the daily episode. The idea is to have a team that develops new content, ideas, formats, that they visualise and write. The idea is to create a team that is not like a content factory. If need be, we will produce.
How big a hole is sports burning into the profits of the entertainment business?
Cricket is working fine. All the local league development we are doing like, kabaddi, football, hockey, etc, we knew it would take time. But, in the long run, the economy of cricket will be challenged. And, we are building assets for such a time in the future. Everybody is very hung up on the money we are spending on sports (reportedly Rs 20,000 crore). But that is being spent over eight years. Also the way cricket works is you pay for each match. So, there is a big load on the profit and loss in big cricket years. In moderate cricket years, there is no issue. In cricket we are now over with the peak investment phase.
The Sony-IPL deal gets over next year. Will Star be bidding?
The Sony contract is heavily loaded in its favour - it has the first right of negotiation, gets the first right to make an offer and is entitled to a counter offer. If it comes in the market, we will bid. But, we are not thirsty for cricket; we already have a sizeable portfolio of cricket.
Why are you taking Hotstar global?
There is a substantial diaspora in Singapore, Malaysia and other markets. And, there are limits on the number of people who can be reached through linear TV. Also, the way the whole market is structured is loaded against us. You have to buy your way into the basic pack and get some half a dollar per subscriber. So far there was no choice but with Hotstar, we can bypass the cable operator and go straight into households.
