As it happens with couples who reunite, there is new bonhomie in the recently resurrected relationship between STAR India, the dominant broadcast network, and Balaji Telefilms, its principal supplier of soap operas. Although the two are old partners, it’s a new contract without the exclusivity, which was a critical element in the first decade of their cohabitation.
Balaji, for one, has taken a long, hard look at its business model. The production house had been grappling with the economic downturn and high production costs when its most popular serial on Star Plus, Kyunki Saas Bhi Kabhi Bahu Thi, was taken off the air two years ago. Programming hours remained flat and realisations fell due to low-yielding shows, with high production costs but a low number of viewers. “Till 2008, we had 80-90 per cent of our shows on STAR Plus and, since the exclusivity clause prevented us from producing shows for other channels, we were hit,” said Puneet Kinra, Balaji’s chief executive.
Reflecting the twist in the script, Balaji’s net profit dipped from Rs 87.38 crore in 2007-08 to Rs 26.32 crore the following year, and further to Rs 15.19 crore last financial year.
“The last two years have been challenging, as the entire industry had to bear the brunt of slowdown and our problems compounded because of our exclusive contract,” said Kinra. After the clause was dropped, it took the company two years to build a bouquet of 10 shows which, it hopes, would put it on the path of high profitability.
“By the end of this financial year, if we are not able to execute 10 shows, there might be some unexpected consequences, but we are confident we will be able to produce those many. We are looking at producing two shows for each of the five leading general entertainment channels (the other four are Colors, Zee TV, Sony and Imagine),” said Kinra. It has already started Keshav Pandit on Zee, Tere Liye on Star Plus and Sarvgunn Sampannn on Imagine.
None of the new shows are of the genre in which Balaji made its fortune — the so-called Saas-Bahu sagas. STAR India, anyway, has much less patience with such shows, as its looks to capture the new hordes of television viewers which have come up outside the metros, in small towns and cities.
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STAR India’s Chief Executive Uday Shankar said: “Ten years ago, when STAR Plus came out with shows like KBC and the Balaji series, they clicked with a certain kind of viewership universe. Television at that time was a big-city, a metro, phenomenon. The economic liberalisation was taking roots. It went to big cities and had an impact on the aspirations of people. STAR Plus could capture that very successfully. But as the cable and satellite universe grew, it went to Tier-II cities, small towns and very small towns. The target group has gone down the socio-economic categories. Today, small towns have a larger share of viewers.”
STAR India’s research showed the power equation in the family had changed, with the woman becoming more assertive and aspiring for more, materially and emotionally. The network wants to cater to this new woman. “Now we have an outlook, a philosophy of content and anybody who produces for STAR India has to buy into it,” said Shankar.
So, has Balaji rediscovered its love for STAR India? “There was no love lost in the first place. Even during the time when the company had a drag in profit margins in 2009, half our revenues were coming from the two serials on the STAR network. Even in our bad times, STAR India has been a friend,” said Kinra.
Shankar echoes this sentiment. “It was a mutual decision to free ourselves. Still, there has never been a quarter where we have gone without a Balaji show.” And, when asked to respond to the buzz that STAR was looking to sell its 26 per cent equity in Balaji, he said: “We have no intention of selling our stake in Balaji Telefims. We never had any intention to snap creative ties.”