WORLD: MEDIA ANALYSIS - Murdoch's new Star TV chief looks to the long term in Asia

There's a long road ahead if Star TV is to replicate Sky's success, Rhymer Rigby says.

Star TV gets precious little press in the UK - and the only reason it's rated the occasional mention in the news recently is because the son of someone very, very important has just left to head another company.

Indeed, the Brits who are most aware of Star are probably gap-year travellers who've been delighted to find some half-decent English-language programming in India or Indonesia.

Yet the broadcaster's footprint is absolutely huge - stretching from Turkey to Japan and from Siberia to New Zealand. It has 43 channels, reaches some 300 million people in 53 countries and is growing at twice the rate of the rest of the media industry.

But these figures are not the whole story, otherwise it wouldn't be a promotion for Murdoch fils to go and run a company with a mere seven million subscribers that operates largely in a single country.

That said, the company that Michelle Guthrie has taken over isn't in bad shape. Under James Murdoch, it made its first, albeit negligible, profit; and, although there were rumblings that its outgoing chief executive was surrounded by such savvy advisors that anyone could have achieved the same results, the end, not the means is what matters to his successor.

"We have a very solid business today," Guthrie says. "My challenge is to take the company on to our next level of growth." She hopes to do this by using the business's size and leverage to expand its distribution, either through putting channels on more platforms, syndication or launching channels where there is demand.

In a sense, Guthrie's job is rather strange. Star, nowadays, is like an old-fashioned conglomerate, comprising a collection of businesses.

And although they all do similar things, they do them in different markets.

So the key to understanding the business is to understand that it has three big and separate markets - India, China and Taiwan - where the bulk of revenue comes from. This is backed up by dozens of much smaller businesses.

(It is axiomatic that two of Guthrie's main competitors for the job were Peter Mukerjea, the head of India, and Jamie Davis, the head of China.)

So Guthrie's role involves steering a group whose constituent parts are more autonomous than most. "The regional heads have a firm grip on what makes us tick in the regions," she says. "And my job is to shape direction for Star overall and to think long term."

But beneath all the impressive-sounding headline figures and recent bullishness, many media commentators are pretty tepid about Star's prospects.

King Lai, the head of Initiative Media Asia, comments: "Star is well established in Asia and has some good profit centres, although India is where it really stands out." China, he adds, is still somewhat hamstrung by who is allowed to receive the channel, although he concedes that, of the foreign broadcasters, Star has better access than most. The other problem in China, according to Lai, is that media rates remain low. Then there are markets such as the Philippines which have strong growth, "but these are not significant".

This is a far cry from the channel's genesis, a dozen years ago, when it really was a pan-Asian broadcaster. "It was an Asian satellite channel based on an advertising model with English-language broadcast across all countries in Asia. Now it's a collection of distinct broadcast businesses.

It's become much more focused on specific country needs," Antony Young, the chief executive of ZenithOptimedia UK and a former head of ZenithOptimedia in Asia, says. Indeed, in India, where it is probably strongest, this is largely because there is so much Hindi content.

But, he continues: "The predominant channels are local terrestrials and it's not in the same league as Sky at all - it's more about having access to 2.5 billion people." Lai takes a similar line: that, despite some encouraging figures, "the perception is larger than the reality". Plus, of course, Sky is subscriber-led while Star is advertising-led.

Others are even less ebullient. Roland Crouch, the chief operating officer of ZenithOptimedia Asia, says: "Its market share does seem to be growing, and it's true that people spend more time watching, but it's still small and my sense is that they're struggling." As for Millionaire, its most notable success to date and the source of a lot of revenue: "They got lucky."

He adds: 'Star has always been about potential. But we have been impressed with Murdoch's commitment. He'll do it for as long as it takes. But (if and when success does come) it'll come in different shapes and forms to the current format."

This, in a sense, is the crux of the matter. For many, the question is not whether a pan-Asian broadcaster is a good or bad thing but whether or not one should exist at all. You have only to look at the differences between India and China to see why pan-Asian campaigns are hardly big bucks. One observer says: "Put it this way: I wouldn't put my life savings in it."

Still, as Young explains: "There are strategic reasons, otherwise, Murdoch wouldn't have persisted with it." Add this to Guthrie's observation that "the long-term plan is to help advance the industry in Asia" and you realise that, if Star is to replicate the success of Sky, it's at the start of a long and uncertain road. If Guthrie's remit is to take the business to the next level, she has her work cut out for her.


China 41,780,000

India 31,700,000

Taiwan 5,717,150

Rest of Asia 15,942,993

Total 95,140,143

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