STAR to launch 2nd entertainment channel  ( May '24,2003, ET)

STAR is launching a new entertainment channel, ‘STAR Classic’, in the free-to-air mode aimed at rural and small-town audiences.

The object is to provide an alternative to advertisers of mass brands and to compete with channels like Doordarshan and regional channels offering a high reach at cheap prices. Business plans for the broadcaster also include the launch of two more news channels for Tamil and English-speaking audiences. Currently on the drawing board stage, these news channels are expected to be launched towards the end of this year.

There would be economies of scale if several news channels make use of the large newsgathering structure STAR is setting up for its Hindi channel, Peter Mukerjea, Star TV’s CEO in India, told ET.

STAR Plus, the broadcaster’s premier entertainment channel, currently charges an average advertising rate of Rs 3.5 lakh for 30 second spots during prime time. Despite the channel having an undisputed grip over the popularity charts — close to 45 of the Top 50 all-India programmes are on the STAR Plus platform — it has recently experienced a plateauing of ad revenue. Resistance from advertisers to repeated hikes in ad rates and cheaper alternatives like DD have stymied further growth of ad revenue.

To stem the drift of media planners to other broadcasters, STAR is pitching a free-to-air entertainment channel which will offer competitive airtime rates to advertisers as well as provide a reach to markets in small towns and the hinterland.

Programming costs for the channel will be kept rock bottom by putting on air re-packaged versions of old shows like ‘Saans’ and ‘KBC’. “An entire generation may not have seen many of these good shows in the STAR library, when the channel was first launched,” Mr Mukerjea said.

For instance, the average cost of advertising on prime time shows of DD averages around Rs 75,000 for 30 seconds. STAR also faces the problem of escalating programming costs to stay in the lead, while the advertising air time inventory is limited to 12.5 minutes per hour.