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Mixed reaction at industry over STAR-Balaji alliance

24-August-2004
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Mixed reaction at industry over STAR-Balaji alliance

STAR India’s partnership with Balaji makes its presence in television’s content providing segment once again. Prior to this, the marriage was with UTV. For the channel and the production house, the alliance seems to be a natural step forward to their existing relation. For some members of the industry, it is so far, “business as usual”, while for others, there is “no Comments”. While the industry isn’t very comfortable speaking on the subject, what it has definitely done for STAR India is give it an advantage over other channels.

To give a little more insight here, in the month of May, industry was abuzz with the word that STAR had clearly told a sizeable number of production houses that the channel wanted exclusivity or simply people who would not work with Sony. Not many production houses could be bullied which has led to a certain amount of overlap between the channels but one content provider that couldn’t be controlled at all, was Balaji Telefilms. With this alliance, this status has altered in STAR’s favour.

Based on our interaction with both production houses and channels, it appears that while at one hand, content providers don’t have much problem with the alliance, on the other, channels don’t have much to say.

Standpoint of Production Houses

Sanjiv Sharma, Director, Optimystix sounds optimistic about the development. “I think this is a very positive move for production houses. It indicates that content houses are reaching a level where broadcasters take them seriously enough to invest in them,” he says. Though the production house has nothing on STAR currently, it is doing Sony’s ‘Ye Meri…’ and the forthcoming Indian Idols.

Echoing Sharma, Nikhil Alva, CEO, Miditech, says, “You could expect similar alliances to come in the industry. STAR and Balaji in their current positions have joined hands and soon there could be other such partnerships as well.” The production house is currently producing ‘Saara Aakash’ for STAR Plus and has other shows on other STAR channels. For Sony, it is currently associated with ‘Hum 2 Hai Na’ and would also do Indian Idols.

“This is just putting what in any case was the scene in black and white. Balaji is a strong content provider and hats off to them for doing such good work. They are already providing a substantial portion of STAR’s content and this is just fructifying the relation further,” expresses Anuraddha Prasad, Managing Director, BAG Films. The production house is responsible for various shows for STAR India but none for Sony, currently.

Does the partnership with Balaji bother them in terms of confidentiality? “This is an idea driven business, which works completely on trust,” says Alva, “It has been like this always and I don’t see how a partnership of this nature alters anything at that level. A creative outfit is as good as its last big idea. Developments like these don’t alter that.”

“I think the very reason of this alliance is for STAR to be a partake of the profits that Balaji is making,” adds Sharma, “Looking at it from the business point of view, I don’t think STAR would try to hinder revenue streams from Balaji in any way." Prasad observes, "Both Balaji and STAR are completely professional and I don’t think that people would even think at that level.”

Needless to say that at least on the face of it, this appears to be a positive sign for production houses. The belief largely is that they don’t have their equations with STAR changing as a result of this development.

Standpoint of Channels

As for the channels, Sony Entertainment Television has a clear line of thought on the development. “We have been told that Balaji maintains complete managerial control and we respect this. In the current state, we have two shows with them and they are not going off-air due to this alliance,” states Sunil Lulla, EVP and Business Head, SET India.

On the fact that two STAR directors would be on Balaji’s board now, which would essentially mean access to all kinds of information that the production house would engage in with other clients, Lulla remarks, “There are specific ways in which companies operate and Balaji should be able to take care of confidential information. As I said, they have communicated to us that they will retain managerial control.”

Given the STAR Vijay and Balaji’s client Sun Networks’ scene in the south, Kalanidhi Maran, Managing Director, Sun Network, explains, “The deal with us is simple. Balaji works with us until it doesn’t produce any shows for our competitors.”

Citing an example, he says, “UTV owned STAR Vijay and they were marketing for us. They were not doing it for competition and we had no issues. Even in this case, I don’t foresee any problem. As far as confidentiality is concerned, I’m sure both Balaji and STAR are professional enough to not to create problems of any kind in the business.”

The alliance is a win-win for both STAR and Balaji. While for the channel, it gives substantial control over the kind of products that Balaji would give to other channels, for Balaji, while majority of its business is with STAR, with another channel on the anvil, the scene should ideally just get better.

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