Nine years after they split, STAR India will manage the advertising sales of NDTV’s new channels.
NDTV and the Indian arm of Rupert Murdoch’s STAR signed an agreement today under which the latter will be the sole and exclusive representative of NDTV 24x7, NDTV India and NDTV Profit. In addition to the frontline sales, STAR India will also be responsible for commercial back-office management such as traffic, scheduling, billing and collections.
Business Standard first reported the impending earlier this month.
Kevin Vaz, who heads ad sales of STAR network, will be given additional responsibility of the three NDTV channels for the time being. Industry watchers, however, predict some exodus of personnel from AIDEM, the company that earlier sold NDTV's channels.
“With this, STAR India will get complete commercial charge of NDTV channels,” said Nitin Kukreja, executive vice-president, business development, STAR India.
Earlier in December, NDTV entered into a deal with STAR DEN for distribution of its channels across various platforms such as cable and DTH. Prior to this, NDTV channels were distributed by TheOneAlliance, a brand of MSM Discovery.
“STAR, India's leading and most successful television network, has been a trusted partner in the past and NDTV looks forward to this new initiative which will be of mutual benefit. In many ways it is a perfect fit,” said Prannoy Roy, Chairman, NDTV, in a statement.
According to industry sources, the alliance comes with a minimum revenue guarantee of around Rs 260 crore that STAR has offered. There will also be a slab-wise revenue sharing formula. There is, however, no timeframe specified in the contract said sources, but its evident that if STAR fails to meet the minimum target, the deal will be off.
Since its inception in the 24-hour news channels avatar in 2003, NDTV Group, across all its subsequent news and lifestyle offerings, worked with Raj Nayak-led NDTV Media for its ad sales function. Even after Nayak altered his arrangement with NDTV to form Aidem Media in March 2010, NDTV continued with Aidem for its ad sales requisites.
“The presence of NDTV news will strengthen STAR’s sales bouquet and enable STAR to offer a comprehensive option to advertisers and agencies in achieving best-in-class monetisation,” Kukreja told Business Standard.
STAR also has 26:74 joint venture with ABP Pvt Ltd, called Media Content and Communications Services (MCCS), which runs three news channels — STAR News, STAR Ananda and STAR Majha while NDTV runs NDTV India in the Hindi news space
Denying any conflict of interest, Kukreja said the NDTV arrangement was of a commercial nature and would be independent of STAR's existing news commitments.
STAR's management did not want to comment on any specific potential deal. "All parties concerned have different shareholders to address to. So I cannot comment on how things will or can pan out in future. But logically, consolidation in the news space makes sense," said Kukreja.
The remaining properties, including general entertainment and films, home shopping and sports, and National Geographic and History Channel franchises, come under SIPL whose CEO is Uday Shankar. According to media analysts, given STAR’s size, sales commission would not make much of a difference to STAR India. “What can be expected is a bigger relationship at a later stage which could even include a realignment of the existing MCCS-Star JV,” said a media analyst. Many are predicting a merger between MCCS and NDTV with STAR taking a bigger equity role in future.
