The speculation is over. The people who have been credited with STAR’s leadership for over six years in the Indian television space -- Peter Mukerjea, CEO, STAR Group, and Sameer Nair, CEO, STAR Entertainment -- are on their way out. What is significant is that they are both, in their own different ways, set to create competition for STAR India itself.
The acceptance of their resignations is now official; an announcement was made on Sunday, January 21, 2007. Mukerjea will leave the company at the end of January while Nair will leave at the end of March. STAR also announced that Paul Aiello, STAR CEO-designate, will be the acting Chief Executive Officer of STAR India.
Commenting on the announcement, Aiello said, “Peter and Sameer are two extraordinary executives in the industry. The transformation of STAR India into the leading television network in the country came in no small part due to their leadership. It is with great regret that we accept their decisions to resign from the company. We thank them for their tremendous contributions and wish them all the best in the future.”
Mukerjea has confirmed that he has joined the board of INX Global as Chairman. Destination next for Nair is with NDTV, but all that could be ascertained right now was that he would be in a partnership role hereon, rather than an employee.
For the record, NDTV sometime ago had announced its intention to enter the entertainment segment in television, or the GEC segment that STAR has lorded for a long time under the leadership of Mukerjea and Nair.
Nair has tied up with Karan Johar’s ‘Dharma’ and in all likelihood will take the likes of Shailja Kejriwal and Gaurav Gandhi with him. The question is can Nair repeat STAR success story for Prannoy Roy’s NDTV.
As for Mukerjea, he is tying up with other partners to enter the entertainment space – and Mukesh Ambani is one of these partners. It is learnt that Ambani will back Mukerjea in a personal capacity, up to about 15 per cent of this venture. It is believed that close aide Anand Jain is handling the transactions here. Ambani will not be in this venture in a Reliance capacity, given the no-competition clause with younger brother Anil's ADAG. Mukerjea has more in the game for this venture. The first product expected from this entity is a Hindi entertainment channel.
There are many milestones that Nair, together with Mukerjea, achieved for STAR India that led to making STAR the biggest media company of the country. From the ‘KBC’ launch on STAR to introducing soaps that have stayed with the Indian primetime long enough to give STAR 50-on-50 and then 45-on-50 for almost seven years now, to identifying new media as the future – Nair has quite a lot to his credit.
However, the obvious question really is that within just a year of being given charge of what he knew how to do best, why has Nair decided to leave STAR and with it arguably the most powerful position of the Indian media industry?
The first obvious answer comes in the group’s revenue on the whole and the manner in which STAR Plus’ performance shook in the last year. A shortfall in revenue had been recorded in the last year – media sources put the drop to be over 20 per cent in revenues and even go to the extent of stating that the cancellation of the annual sales conference further plummeted the already low morale in the organisation.
The second pointer lies in ratings. Still a leader by a considerable margin, STAR Plus has seen a drop in shares in the last year. However, the drop hasn’t been significant enough to cause trouble for a CEO. The only other channel growing was Zee TV. Even though Zee TV challenged STAR’s 9.00 pm dominance for a while, STAR Plus did manage to make a comeback.
What then could be the problem? People close to Nair like to explain this away as a natural way of life – evolution. From working for someone else, it only makes sense for Nair to work for himself now. From what is heard, Nair would be in co-ownership in the Prannoy Roy camp, with Johar likely to be the other partner.
There is another view regarding his move. Nair decided it was the right time to move on from an organisation like STAR that is right at the top. It is not easy to keep it there. People even within STAR like to call it the sinking ship now. That said, Nair has made it clear on more than one occasion that shows like ‘KBC’ and ‘Antakshari’ are his gambles and he takes full responsibility for the bouquets and the brickbats that come with it.
In the case of Mukerjea, sources have divulged that the company would also have investments from an international company, an Indian bank and Mukerjea himself. Will the likes of Sumantra Dutta and Yash Khanna join Mukerjea? At least in the case of Dutta, it can be expected, say STAR insiders.
While both Mukerjea and Nair can take legitimate credit for making STAR India a jewel in Rupert Murdoch’s Asian operations, it is also true that these are also the men who couldn’t repeat STAR Plus’ success in STAR One.
Besides, six-month-old divisions like Licensing and Merchandising have not taken off yet. Professionals in departments like sales and programming are facing an all-time low morale and there isn’t even a marketing head currently.
STAR Group was working on plans for a Home Shopping channel, Magazines and OOH. One does not know what has happened to these departments with no initiatives having being taken on these fronts.
All said and done, somewhere along the way Rupert Murdoch appears to have lost track of what was happening in India, which was his Asia cash cow. That said, there are interesting times ahead for the Indian television media. Should Murdoch or Vijay Singh, the new man in at STAR India, be worried already? Only time will tell.