Murdoch Restructures Star TV

India and Greater China Gain More Autonomy, CEO Paul Aiello Resigns

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HONG KONG ( -- News Corp. will restructure its Asian broadcast businesses into three units, Star India, Star Greater China and Fox International Channels (FIC).

The decision to revamp News Corp.'s Asian operation is largely a cost-cutting measure that reflects the toll the global recession has taken on ad sales for regional media owners.

Paul Aiello
Paul Aiello
Up to 200 layoffs are expected at Star's Hong Kong headquarters, about 30% of its current staff size, including CEO Paul Aiello, who will leave Star by the end of December.

The restructuring also reflects the relative strength of India's pay-TV market and the growth opportunities that still exist there for regional media broadcasters -- as well as the difficulties facing those same companies in the other big Asian market, China. Thanks to China's Communist government, the mainland remains largely off-limits to foreign broadcasters.

"While it was once natural to have a larger, regional headquarters, the company has now reached a scale in its key local markets where we are ready to empower the teams on the ground and move a number of functions to be closer to viewers," said James Murdoch, News Corp.'s chairman-CEO, Europe and Asia in a statement.

John Lau, Star's president, China and Taiwan, and Uday Shankar, CEO of Star's division in India, will now report directly to Mr. Murdoch, the son of News Corp's 78-year-old chairman-CEO Rupert Murdoch, and his likely successor. James Murdoch was also the chairman-CEO of Star TV from 2000 to 2003.

Mr. Shankar will also oversee Star's sales and distribution offices in the Middle East, the U.K. and the U.S. and the sales and distribution of all Fox-branded channels in India.

India has been the only real star for News Corp. in Asia to date, driving both growth and profitability. The country had 94 million pay-TV homes at the end of 2008, growing at an annual rate of approximately 8%. Star broadcasts 19 channels in eight languages in India that generate more than three-quarters of Star's approximately $1 billion in annual revenue. Programs like "Kaun Banega Crorepati," a local version of "Who Wants To Be a Millionaire" on Star Plus, have become part of India's pop culture.

Fox International Channels will combine the English-language channels previously managed by Star with the Fox and National Geographic brands for distribution in the rest of Asia. Regional operations in Hong Kong will shrink.

The Greater China division will oversee Star's Chinese-language channels, including Star Chinese Channel, Xing Kong, Star Chinese Movies, Star Chinese Movies 2 and Channel [V], the Fortune Star movie library and its joint ventures, Phoenix Satellite Television Holdings and Fox Star Studios. With mainland China largely closed off to Star channels outside of hotels and housing compounds for foreigners, much of the viewership comes from households in Taiwan and Hong Kong.

Hong Kong-based FIC, meanwhile, will combine Star World, Star Movies and Channel [V] International with channels under the Fox and National Geographic Channel brands. The business will be managed by Ward Platt, president, Asia, and Zubin Gandevia, chief operating officer, Asia.

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