A few weeks ago Rupert and James Murdoch – and other media leaders – met with India’s Prime Minister Narenda Modi in New York. At the time Rupert Murdoch tweeted “Great hour with Indian PM Modi. Best leader with best policies since independence, but massive task to achieve in most complex nation.”
Also present with Modi were influential business leaders Sir Martin Sorrell (ad agency WPP), and the heads of Ernst & Young, JP Morgan, Blackstone and others.
A few days ago Modi announced the lifting certain restrictions on Foreign Direct Investment (FDI). Outsiders can now own 49 per cent of a News Channel and much more generous foreign ownership (up to 100 per cent) of DTH and cable operations.
There’s talk locally that this might well tempt the Murdochs into a wider role in India. Of course, they are very present via their Star TV operation. Indian web-site Television Post says that Star India until recently held a 26 per cent stake in Media Content & Communications (with the APB Group holding the remaining 74 per cent). But relations between the two soured and Star exited the news relationship. Fox is very much present in TataSky (where it has a 30 per cent stake).
That could now change, and while 21st Century/News Corp might be a high-profile incomer, the same argument could apply to Viacom, Discovery, Turner/Time-Warner, and others.
James Murdoch indicated a change in the shareholding structure when he was speaking at the recent Goldman Sachs 24th Annual Communacopia Conference in New York, saying: “The Tata Sky business is different because it’s a 30 per cent shareholding and we are partners there. We have to see what the future holds. What the shareholding and capital structure there looks like remains to be seen. We will be talking to our partners. You will probably see some changes there.”
But there’s also an opposite argument. Important as India is, it is not necessarily a high-value market, either in broadcasting or DTH. DTH and cable subs are miserably low – but numerous. However, if the Murdochs see a reasonable rise in DTH subs value, and elimination of the under-reporting of cable subs, plus a fairer reward for incoming investors, then India’s huge middle class could prove to be a lucrative media environment.