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Breaking News :  Star eyes $500 million revenue from entertainment & sports by 2018: John
Tuesday 15-September-2015, 13:39,
Star eyes $500 million revenue from entertainment & sports by 2018: John
MUMBAI: Rupert
Murdoch's
21st
Century
Fox
is
relying
heavily
on
its
subsidiary
Star
to
lead
its
international
growth.
Explaining
how
Star’s
growing
entertainment
ad
revenues
makes
it
a
key
player
in
the
company’s
plans
to
focus
internationally, 21st Century Fox
chief financial officer (CFO) John
Nallen said, “One of the top
priorities, uniquely for us is
international. We've got a particular
focus on growth outside the US. We
continue to harness the assets we
have in Star, FIC (Fox International
Channels) and in Sky but we continue
to be opportunistic to the extent we
can outside the US.”
As was reported earlier by
Indiantelevision.com, this falls in line
with a recent Morgan Stanley report
that valued Star TV at $11.2 billion,
where $300 million is the network's
gross revenue from entertainment
business as of June 2015.
Given the growth rate, Nallen
anticipates that number to reach $500
million by 2018. “We feel confident
about the $500 million target for
2018,” he said.
It may be recalled that earlier this
year, 21st Century Fox CEO James
Murdoch had said that Star India is
likely to earn operating income of $1
billion by 2020.
The growth, according to him, is
coming from two factors -
entertainment and sports. “The first
is the continued growth of the
entertainment business, which is the
hallmark of the Star business. We get
23-24 per cent market share every
night. It's a market that is growing.
In the last six months TV ad market
grew 21 per cent, we over-indexed
because of our strength,” said Nallen.
While entertainment continues to be a
source of revenue for Star, its sports
section is doing equally well. Seeing
the prospects the company had earlier
made its biggest sports investment by
launching six sports channels with
Star, which paid off for the network
as “an enormous viewing success.”
Nallen, who was speaking on the
company’s business strategy for the
next couple of years, at an industry
summit, also pointed out on the
company’s strong focus on expanding
its international reach and growth
through Star TV. “Top opportunity
continues to be international, led by
Star, which clearly is going to lead a
lot of our international growth,” he
said.
Calling its Indian subsidiary - Star
India, an undervalued asset, Nallen
pointed out the growth statistic
predicted from Star, which rides on
the network’s continued success rate
in the entertainment section, unlike
the parent company’s recent
experience of the same in the US.
“Our ad growth in the US is coming
from news and sports, and not from
entertainment. If you take our total
revenue, roughly 30 per cent of it
comes from advertising. Two thirds of
that advertising total comes from
news, sports and international. The
place that we are focusing on and the
place people feel more vulnerable is
entertainment advertising in the US.
That’s the rest of the one third
left,” Nallen said.
Additionally, Nallen also clarified that
Fox has no plans of further
incremental investment in Star this
year. "Not much more investment (in
Star). This year we grew the
investment because we extended one
of the sports franchises that we
started, the local Kabaddi sport that
has turned into a phenomenon in
India. There is not a massive new
incremental investment that we need
for Star," Nallen informed.
http://www.indiantelevision.com/televisi...len-150914
ANIL G
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