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September 10, 2001

India's Star TV Leaps to Top Spot
Due to Game Shows, Soap Operas

By Michael Flagg
Staff Reporter of The Wall Street Journal

BOMBAY, India -- Last year, Rupert Murdoch made a rare trip here to check on his television operations. The media magnate's Asian broadcaster, Star TV , had been incurring losses for almost a decade, and Mr. Murdoch wanted that to stop.

"He thumped the table," says Sameer Nair, Star's programming chief, "and said, 'This is pathetic. I don't want to see this again.' "

So far, he hasn't. Back then, Star Plus, Star's biggest channel here, had two shows in the top 50. This year it has 39, including the top 15.

The reason can be found a few kilometers down Bombay's muddy streets, where Amitabh Bachchan has just wrapped up the anniversary show of "Kaun Banega Crorepati," as "Who Wants to Be a Millionaire?" is called in Hindi. Mr. Bachchan -- the newspapers call him "Big B" -- is one of India's biggest movie stars. He is resting in his dressing room behind a two-meter-tall reproduction of Van Gogh's "Sunflowers" and a submachine-gun-toting guard who is here as much for show as security.

"I was very scared when the show started," says Mr. Bachchan, sporting a clipped gray beard and one of his trademark tunics. "I had never done TV, and quiz shows are so ... impromptu. I never thought it would be this big."

Hardly anyone else did, either. Star TV has rattled India's television market, jumping from a distant third place to No. 1 in just a few months last year. While "Millionaire" has started to run out of gas -- Star runs the program twice as often as the show's creators recommend -- it leads into a pair of prime-time soap operas that have become even more popular than the game show. Multiple episodes of other game shows, soap operas and music programs make up the balance of Star's top-50 fare.

Star TV is a huge gamble for parent company News Corp ., which Mr. Murdoch has built from a single Australian newspaper into one of the world's biggest media companies. While Walt Disney Co., Viacom Inc. and other foreign broadcasters have come to Asia with niche cable channels like ESPN and MTV, News Corp. is launching whole new networks. It is taking on Asian broadcasters in India and Taiwan with the same kind of general-interest channels the locals run: quiz shows, dramas, soap operas, news -- all in the local language. By contrast CNN, owned by AOL Time Warner Inc., the world's largest media company, broadcasts only two programs a week from India, both in English.

Like most of the Western broadcasters, Star is unprofitable in Asia, which has half the world's population. India is increasingly essential to any turnaround strategy. When foreign cable-television channels like CNN and MTV started arriving in Asia a decade or so ago in their march around the world, China -- which would shortly have 90 million homes hooked up to cable, more than any other nation -- was the place they wanted to be. But the world's biggest country has turned out to be the world's largest roadblock to these companies, tightly restricting how many hours they can broadcast.

These companies are still trying to expand their businesses in China, and News Corp. and AOL Time Warner recently had a major breakthrough when the Chinese government said the companies were close to getting permission to broadcast Chinese-language channels into China. Yet companies like Star are finding that the half-century-old democracy of India is far more hospitable. Star's India revenue hit almost $160 million for the year through June, said a well-placed person in the industry. That is more than double Star's next-biggest market, small but prosperous Taiwan. India is also the largest market in Asia for MTV and one of the biggest outside Japan for CNN and Cartoon Network, another AOL Time Warner channel.

For years, India was a disaster for News Corp. Star, or Satellite Television Asia Region Ltd., was one of the first foreign channels to land here. In the decade since 1991, though, as India zoomed to 80 cable channels from none, Star blew that advantage. Its first owner, Hong Kong tycoon Li Ka-shing, was more interested in China, and when an Indian businessman named Subhash Chandra asked Star for satellite time for his own Indian channel, Mr. Li's son Richard, who ran the network, readily agreed.

Mr. Chandra, who had earned his fortune making toothpaste tubes, and his Zee channel were onto something. Instead of replaying American television programs like the cop show "NYPD Blue" and "Beverly Hills 90210," as Star was doing, Zee Telefilms Ltd. gave Indians their own shows, with Indian actors speaking Hindi, a language spoken by about a third of Indians but understood by probably twice that many.

In 1993, Mr. Murdoch, anxious to extend News Corp.'s reach from the U.S. and Europe into Asia, bought Star TV, inheriting the deal with Mr. Chandra. It was a fractious partnership. When Mr. Murdoch took over, Star wanted to make Hindi-language programming, too, but Mr. Chandra insisted their agreement barred Star from doing so. For years, Star limped along a distant third behind Zee and Sony Corp., which had turned itself into one of the world's largest broadcasters of Hindi shows.

Finally in 1999, Star and Zee got a divorce, and Star was ready for change. But Mr. Murdoch couldn't lead it personally. Several years earlier, the media magnate, whose hardball business tactics, conservative politics and low-brow programming has made him controversial around the world, was sued for obscenity by several Indian lawyers and threatened with arrest should he set foot in the country. Shows like "Baywatch," with its scantily clad lifeguards and the B-movie "Stripped to Kill," about a cop who goes undercover as a stripper, were "repulsive, filthy, loathsome, indecent, lewd and scurrilous," the lawsuit said. They would "have the impressionable youth of India believing that it is permissible to walk around naked."

By February 2000, the lawsuit settled, Mr. Murdoch was free to enter India to see first-hand why Star was floundering. Star says it incurred losses of nearly $500 million in just four years through the middle of 1999, much of that almost certainly coming in India. Sony and Zee, meanwhile, say they were making money.

News Corp. needed to make those losses shrink. At the time, the company was planning to sell part of its world-wide satellite-television operations to the public. (News Corp. has since scotched that plan in favor of buying a satellite company in the U.S. that is already publicly held and putting Star TV and its other satellite operations into that company.) While Mr. Murdoch watched, Mr. Nair nervously started a slide-show presentation to explain his new lineup of shows. The first slide said "Where We Are Today." It showed that Zee had 12% of the audience, Sony 11% and Star 3%. That's when Mr. Murdoch thumped the table.

The reason for Star's miserable performance was simple. "We were known as the white-skinned channel," says Mr. Nair, who became the programming chief after Mr. Murdoch fired the previous management. "We couldn't get anyone to sample the channel." Star had been pitching its English-language programming to India's emerging middle class. Now, able to make shows in Hindi, it decided to target "mass instead of class," says Mr. Nair. A Star executive in Hong Kong had come up with one idea for that transition: license "Who Wants to Be a Millionaire?" the three-year-old British game show that had been a hit in countries from the U.S. to Egypt.

Mr. Murdoch asked Mr. Nair how much money Star was going to give winners on "Millionaire." A lakh, or 100,000 rupees ($2,121), Mr. Nair replied. Too small, Mr. Murdoch said. What's the next biggest unit of rupees? A crore, or 10 million, said Mr. Nair. That is a huge sum in India, where a couple of thousand dollars a year qualifies a household as middle-class. That's good, said Mr. Murdoch -- make it a crore.

"With a prize of a lakh, after all, it wouldn't have taken much for Zee or Sony to upstage us," says Mr. Nair. "But a crore ..."

With that kind of investment, the show expanded from a half-hour to an hour. It was Mr. Nair's idea to get Mr. Bachchan as the host. Nowhere else in the world is the show emceed by as major a movie star. The actor, 58 years old, had played an angry young man in the movies in the 1970s, but by last year, he was middle-aged, his career had stalled and his film-production company was deeply in debt. Mr. Nair took the actor to London to see the original show being shot, and Mr. Bachchan spent weeks around the Star offices rehearsing his part, asking staffers in his now-familiar reserved but avuncular manner the 15 increasingly tougher questions that contests have to answer to win.

Star had run game shows before. It had licensed a version of the U.S. show "Family Feud," for instance -- but never in prime time, with huge prizes and a big personality like Mr. Bachchan. Star also spared no expense to make the show look glitzy, unusual for the typical low-budget Indian TV program and risky for an unprofitable television channel. Mr. Bachchan insisted the crew wear matching shirts with "Crew -- Crorepati" on the back and the stagehands wear wireless headsets to communicate without yelling across the set. "Whatever we saw on the London set, we duplicated," says a Star executive. "From an Indian perspective, there's a phenomenal amount of organization."

From its launch last July, Star ran "Millionaire" four nights a week, Monday to Thursday, from 9 p.m. to 10 p.m. to carpet-bomb the opposition. ("Millionaire" replaced the nightly news in English.) It was the first time that tactic had been used in prime time in India.

In their second week, the four shows were the top-rated programs on TV. Advertisers besieged the channel, which tripled its prime-time rates to $24,000 for a 30-second spot. In entertainment-starved India, where the stodgy government broadcaster Doordarshan had ruled the airwaves for decades, the streets of Bombay were almost deserted while the show was on. Theaters and restaurants around the country emptied. In the city of Cawnpore, 84% of all the people watching cable TV at the time were watching "Millionaire."

Star's competitors still seem stunned.

After a year and three crore-winners, "Millionaire" is starting to trail off in the ratings, as its 77 versions around the globe inevitably do when "quiz-show fatigue" sets in. (The show's British owners say this fatigue accelerates when the program appears more than twice a week.) To give the show a jolt, the Thursday show has been moved to Sunday morning and is now the first regularly scheduled kids' version in the world. The slack is taken up by two half-hour soap operas into which "Millionaire" leads. One of them, "The Mother in Law Was Once a Daughter in Law, Too," about a wicked mother-in-law and her long-suffering daughter-in-law, runs Monday through Thursday; those four episodes are now the highest-rated cable-TV shows in the country each week.

It costs about $7,000 and takes roughly two days to bang out a half-hour episode of "Mother in Law"; five minutes of advertising on each show, meanwhile, can bring in more than $200,000.

Star is still bleeding red ink, but thanks to those kinds of numbers, it narrowed its losses in the region by a quarter last year (although the exact size is unclear because News Corp. doesn't disclose figures for individual units). Star is taking in more money than either Zee or Sony these days, say stock analysts.

But fortunes can turn quickly for television networks. Zee started rolling out two dozen new shows in August, including more soap operas and game shows, and is promoting them heavily. "After all," says R.K. Singh, Zee's chief executive, "'Millionaire' brought Star back at one stroke."

Write to Michael Flagg at michael.flagg@awsj.com


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