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Local alliances have allowed Murdoch’s Star TV to virtually dominate

Asia.

Rupert Murdoch, head of News International, has trampled over many local

sensitivities as he’s expanded his empire into Asia. But, say what you

will, his Star TV network has changed the Asian television landscape

forever.

Murdoch began his tempestuous relationship with the region by boasting

that satellite services such as the ‘tell-it-as-it-is’ BBC could

override cultural and political boundaries. They were words he later had

cause to regret because they provoked the Chinese government into

cracking down on all Western broadcasters.

Murdoch has also been ruffling feathers in India. Last year, a warrant

was issued for his arrest when a guest on Star referred to Mahatma

Gandhi as a ‘bastard bania’ (trader), to which the presenter simply

laughed.

In short, Murdoch has found the task of replicating the success of

Britain’s BSkyB across 53 diverse cultures daunting. Distribution is a

particular headache in the region. Dish ownership is illegal in some

markets, the cabling infrastructure non-existent in others, while,

elsewhere, cable operators are completely lawless and unaccountable. In

fact, the problems make any declared intent to be a subscription-driven

service look decidedly like long-term planning.

Star has also had to contend with a dearth of independent ratings

systems in most markets. In 1994, it split its beam into two - North

and South Asia - to allow advertisers to buy into either Taiwan or

India. The other countries in the region are viewed as possible add-on

bonuses because no sensible customer numbers are available. The only

publicly available data is Star’s own claim that 220 million people have

the ability to view the service.

Still, credit where it’s due. Having pioneered regional broadcasting,

Star is now taking the high-road in evolving the medium. Its plans to

splinter from a five-channel regional platform - including BBC

Worldwide, MTV, Prime Sports, the entertainment channel, Star Plus, and

the Chinese Channel - were tabled in July 1993 when Murdoch first bought

a stake in Star from one of its joint founders, the Hong Kong

telecommunications company, Hutchison Whampoa.

Splitting the beam was step one - digitalisation is the second phase.

Since April this year, the introduction of digital technology has

enabled a standalone mix of sport, music, movies and general

entertainment to be beamed from Japan via Star Plus Japan.

In another strategic manoeuvre, in March Murdoch linked up with Chinese

partners, Today’s Asia and China Wise International, to create a

Mandarin-language entertainment channel specifically for the Chinese

mainland.

The resulting station, Phoenix, is a strong product compared with local

options in China, according to Martin Dufty, the Saatchi and Saatchi

media director of buying operations for China.

If the local partners can help expand and legitimise Star’s distribution

base - a big problem - then its potential in China could be even greater

than it realises. When data collection has developed so that the

performance of the different cable services can be broken down, Star

should perform well, Dufty comments.

Joint ventures have already proved successful in India, where Star

bought a 50 per cent stake in the Zee TV satellite service at the end of

1993. The two of them then introduced two further jointly owned local

language services: the Hindi entertainment channel, El-Tv, and then the

Hindi pay-TV service, Zee Cinema.

Commercially speaking, Star has helped to refine and develop marketing

concepts that have been little used in Asia’s recently deregulated TV

markets - from sponsorship and naming rights to exploring direct

response possibilities.

Star has also introduced niche broadcasting - perhaps most notably its

music service, Channel V, which is helping to create a cohesive Asian

youth culture.

Although overall ratings points for Star services in one of its

strongest markets, Taiwan, can be a lowly 1.2, according to

Stentor/BBDO’s media director, Davis Chung, Channel V is bought for its

quality of programming, rather than its weighting. It’s a very special,

vertical channel, he says.

But the service is years away from being profitable. Murdoch’s initial

dollars 525 million outlay was believed to be based on ad revenue

projections of dollars 80 million for 1993 and dollars 110 to dollars

120 million for 1994. Towards the end of 1993, Murdoch anticipated

losses of dollars 50 to dollars 100 million for the next two years.

However, News Corp’s latest figures show that its operating income from

TV interests - including Fox in the US and Star - fell 44 per cent to

dollars 59 million in the first quarter of 1996. In July, Murdoch forked

out a further dollars 299 million for the remaining share - but all had

long gone quiet on the revenue front.

Playing your cards close to your chest is one of the tricks of the new

sales guard. Gary Davey, chief executive of Star since 1994, may have

brought a family feel to the management style but he also battened down

the hatches on information that once flowed freely, one insider says.

What is clear, however, is that localisation doesn’t come cheap.

Nevertheless, Star is breaking new ground and resetting media agenda

throughout the region. Few in Asia expect it to fail.

a short history of star

FREE TO AIR

October 1991 Star was set up as a joint venture between Hutchison

Whampoa and the local entrepreneur, Li Ka-Shing. It broadcast five free-

-to-air channels: BBC Worldwide, MTV, Prime Sports, the entertainment

station, Star Plus, and the Chinese Channel.

July 1993 Rupert Murdoch’s News Corporation bought a 63.6 percent stake.

May 1994 Star split into two different beams - North and South Asia.

MTV left the Star platform after a disagreement over revenues. Star

launched its own rival music service, Channel V. The BBC disappeared

from North Asia.

July 1995 News Corporation bought the remaining shares in Star, taking

it to 100 per cent ownership.

May 1996 The media group, Liberty Media/ Tele-Communications

International, took a 7.5 per cent stake in Star, giving the group

access to sports programming for syndication.

PAY TV

April 1994 Star moved into pay-TV with Star Movies in the Philippines

and Taiwan, followed by an international version for India and the

Middle East.

October 1994 Star launched a 24-hour movie channel, Viva, in the

Philippines as a joint venture with the Viva Group.

April 1995 The Indian satellite channel, Zee TV, in which Star has a 50

per cent stake, launched Zee Cinema in a joint venture.

March 1995 Star purchased a stake in Indonesia’s pay-TV licensee,

Indovision, to help distribute Star services. The following month it

established a South-east Asian headquarters in Indonesia.

April 1996 Star launched Star Plus Japan.