Is Star TV on the verge of collapse?

New Delhi: While viewers have been talking about the change of guard on KBC, the industry has been agog with the impending change of guard behind KBC. Star stalwarts Peter Mukerjea and Samir Nair, both credited with making STAR the leading private broadcaster in the country, have finally confirmed all speculation and are heading out on separate paths.

So will this move serve a body blow to a network that has been looking vulnerable of late?

As Hindi cinema's biggest star returned to television - he wasn't the only one feeling the heat. The third season of KBC on STAR Plus drew a mixed response and according to online rating agency AMAP, the show saw a rating of 5.35 percent.

Opinions and feedback from viewers were mixed. While some found him good, others found him irritating. KBC 3's tepid start coupled with the exit of its top management is looking like a plotline from it's own primetime soap operas.

Two weeks ago Michelle Guthrie, STAR CEO was replaced by Paul Aiello. Samir Nair who was seen as Guthrie's protégé and rewarded with the CEO title, quit just a day before KBC 3 went on air. Despite rumours that Peter Mukerjea would be persuaded to stay back, his resignation was announced on the same day.

Within 10 months of the STAR empire being carved into two halves, both the network custodians are out. The twin exits and speculation that key people in Samir Nair's team including Shailaja Kejriwal, Paritosh Joshi, Deepak Segal and Harsh Rohatgi may follow him to NDTV's new entertainment venture, appears to have shaken STAR India.

“STAR has been equated with Peter and Samir, and they are seen as the architects of the success of STAR. Therefore, there is going to be a backlash in the industry. People will start saying in the absence of Peter and Samir, what’s going to happen to STAR? That sense will percolate down the organization, with external constituents like agencies and advertisers. I think STAR is really in for a rough patch,” says Managing Partner, Spatial Access Solutions, Meenakshi Madhvani.

Even STAR Plus, which contributes to over 80 per cent of the network revenues, appears to be looking sluggish all year round. The channel, which mopped up Rs 795 crore last year, is not expected to make beyond Rs 600 crore this year. And none of the other channels have matched expectations.

Flanking channel STAR One, launched two years back, is yet to break even, making just between Rs 50 - 70 crore in annual revenue. The distribution deal with Nimbus is also causing the network financial heartburn - the minimum guarantee for the deal is over Rs 800 crore.

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But all is not lost; STAR can take heart from the fact, that any ratings dip may be only a temporary one. “Given the relationship GEC has with audiences, I don’t think they are in a declining stage or are going to falter in the short term. They are as strong as they have ever been and they will continue to hit revenues. Advertisers will be talking to housewives through them,” says CEO, TAM India, LV Krishnan.

While STAR Plus is known to go into a marketing overdrive for its primetime properties, their new hoardings may be less about branding and more about bluster. Industry sources tell us that brands like Dabur have cut down on spends on STAR by two thirds and advertisers are weighing their options to review rates - if ratings continue to dip.

Meanwhile, another strong rumour doing the rounds is that STAR's two new posh shows Kaun Banega Crorepati and Koffee with Karan will follow Karan Johar and Samir Nair into NDTV's soon-to-be-launched entertainment channel.

Mukesh Ambani is believed to be in talks with Peter Mukerjea, to start an entertainment and news channel. Ambani could be financing a part of the project in his individual capacity, rather than through his Group companies. The duo might also rope in Lachlan Murdoch, the estranged son of media tycoon Rupert Murdoch, for possible help and investments. Top executives from media and publishing might also be roped in.

Mukerjea admitted meeting Murdoch but denied plans to enter the TV business, saying he would be joining as chairman of INX Global, an executive search firm run by his wife. Mukerjea is contractually bound against joining a competing news channel for six months.

This development is the latest in a trend of leading domestic industrial houses entering the TV broadcasting business. BBC TV is believed to have held talks with both Mukesh Ambani and the Tatas. Bloomberg TV reportedly approached the Living Media Group and Anil Ambani for a possible foray.