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It's official: NDTV and STAR India are together again

By afaqs! news bureau , afaqs!, New Delhi | In Media Publishing | March 30, 2011
STAR India will now handle the advertising sales for the three NDTV news channels - NDTV 24x7, NDTV India and NDTV Profit, while Aidem will continue to handle the ad sales for NDTV Lifestyle.

STAR India and NDTV have joined hands again. This time, STAR India will handle the ad sales for the three NDTV news channels - NDTV 24x7, NDTV India and NDTV Profit.

Till recently, these three channels were handled by Raj Nayak founded Aidem Ventures, which was formed after Nayak backed NDTV Media and NDTV decided to enter into a fresh arrangement according to which the latter bought back the shares (26 per cent) owned by Nayak and his associates in NDTV Media. The new arrangement was a stop-gap arrangement for both the parties, which is evident from the separation that happened a year after the break-up.

Highly placed industry sources say that the two companies have been at loggerheads for quite a while and have thus settled on changing the terms of their "marriage of convenience".

In 2003, Prannoy Roy (chairperson, NDTV) and Radhika Roy (founder and chief executive producer, NDTV) wanted Nayak (who at that time was with STAR, handling the ad sales for the group) to handle ad sales and airtime for NDTV. Nayak, in his own style, bargained his route and thus was created NDTV Media, a 74:26 alliance between NDTV and Nayak.

In addition to frontline sales, STAR India will be responsible for commercial back-office management such as traffic, scheduling, billing and collections as well.

In an official communiqué, Prannoy Roy says, "NDTV is very pleased to announce this close and important relationship with STAR. It has been a trusted partner in the past and NDTV looks forward to this new initiative, which we are certain, will be of mutual benefit. In many ways, it's a perfect fit."

Meanwhile, Uday Shankar, chief executive officer, STAR India, says, "The combination of the NDTV news brand and STAR's leadership should be able to unlock significant value for NDTV. The presence of NDTV news shall strengthen STAR's sales bouquet and enable STAR to offer a comprehensive option to advertisers and agencies."

About 10 days ago, afaqs! had found out that NDTV was ending its alliance with Aidem Ventures and was inking the deal with its old friend, STAR. However, at that time, senior executives at NDTV, STAR India and Aidem Ventures either denied the development or refused to comment on it.

Narayan Rao, group chief executive officer, NDTV, had told afaqs! in an email statement, "NDTV and Aidem are to continue to retain a close relationship under new and different parameters and functions. NDTV considers Raj Nayak a great leader and his team is among the most talented in the business. The details of our new relationship will be made clear soon."

Interestingly, STAR India already has a 26:74 venture, Media Content and Communications Services (MCCS), with the ABP Group, under which three news channels are operational - STAR News, STAR Ananda and STAR Majha.

This is certainly a conflict of interest on STAR India's part as a share-holder in MCCS. However, industry insiders say that STAR India will not take the NDTV alliance any further and will continue to be part of MCCS.

It's also true that if the MCCS deal falls through, it will not be easy for the ABP Group to retain its stand in the market, minus the STAR brand. Thus, this, too, could be a marriage of convenience for both the parties. There is a clause in the MCCS JV that if the government increases the limit of Foreign Direct Investment (FDI), then STAR India can automatically increase its stake from the present 26 per cent which means that the relationship is here to stay.

Industry insiders also say that if STAR India plans to launch Fox News in India at some point of time, it will be through MCCS or Asianet. And if it chooses to bring Fox to India via NDTV, then venture will have no impact on the MCCS, as its a stand-alone company, functioning completely on its own.

When contacted, Nitin Kukreja, executive vice-president, business development, STAR India, says, "The alliance with NDTV is a completely commercial deal and has no link whatsoever with MCCS. NDTV's set of channels will be handled under the general entertainment category of channels - STAR Plus, which is headed by Kevin Vaz, who is currently president, ad sales, STAR India."

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