Troubled Star TV Sees Fast Growth in Asia

Rupert Murdoch’s Star TV, the media mogul’s big gamble in pan-Asian satellite broadcasting, appears to be off to a promising start despite recent cutbacks, management turmoil and censorship problems in some countries.

Last summer, Murdoch bought a 64% stake in Star TV for $545 million. The acquisition gave his global News Corp. an opening in the world’s fastest-growing TV market, which encompasses more than 2.5 billion people.

On Wednesday, Star TV disclosed that it is now available to about 42 million homes, from China to Saudi Arabia, up from about 11 million households just 10 months ago.

The increase was encouraging enough that Star TV has made plans to start a pay TV channel in India and the Middle East within 12 months. The channel would feature movies from the 20th Century Fox film library, the motion picture and TV studio controlled by Murdoch.

At the same time, however, Star TV is expected to renegotiate its contract to carry the British Broadcasting Co. news channel, because some local governments don’t want foreign news reports beamed into their countries, company officials said. Star TV hopes to replace the BBC news channel with a documentary and educational channel the two companies jointly own.

Star TV carries MTV, a sports channel, the BBC’s World Service TV, a general entertainment channel and a Chinese-language channel. It also owns 49% of Z TV, a Hindi-language channel, and is in the advanced stages of acquiring a second ad-supported channel in India.

“I’m very happy with the results,” Murdoch said. “There has been a great take-up rate in the peripheral countries, like Saudi Arabia and (South) Korea, but the big thing is China, where there is a very determined government policy to build cable.”

Star TV now reaches more than 30 million homes in China, according to a survey conducted by Frank Small & Associates in association with the Chinese State Statistical Bureau. In India, Star TV reaches 7 million homes; in Taiwan it is seen in 2.4 million households. In South Korea, its range has expanded to 183,000 homes from 19,000 in June, 1992.

“We are gratified about these results because they show a demand for TV in the region,” said Sam Chisholm, the News Corp. director who oversees Star TV and BSkyB, Murdoch’s satellite TV service in Britain. “It’s an endorsement of our strategy.”

Star TV may have been compelled to release the survey results to quell fears that the five-channel service was running into management problems. Last week, Jim Griffiths, a former Fox TV executive, resigned as head of Star after five months in the position.

“It just didn’t work out,” Chisholm said, declining to elaborate. “It’s a difficult job.” Star TV has fired 130 employees since Murdoch took over, reducing its staff from 750 to 620, Chisholm said.

Griffiths was replaced by Gary Davey, a News Corp. executive from BSkyB.