MUMBAI: New Delhi Television Ltd (NDTV) has decided to end its advertising sales outsourcing arrangement with Star India for the news business, after allowing the Rupert Murdoch company to handle it from 1 April 2011.
NDTV's ad sales revenue in 2011-12 remained flat at Rs 2.62 billion in a fiscal that witnessed slowdown in the economy.
"We have managed ad sales of our lifestyle channel NDTV Good Times, convergence and other smaller businesses successfully. Star has assisted us in transitioning the team. We see it as a positive step," NDTV executive vice-chairman KVL Narayan Rao told Indiantelevision.com.
NDTV will take its sales and marketing destiny into its own hands from Star India and the transition process has already begun. The Star sales team that was working on the NDTV channels -- NDTV 24X7, NDTV Profit and NDTV India -- will be transferred to NDTV.
The transfer of sales team from Star to NDTV will ensure close integration with a number of fresh initiatives that NDTV is launching. Under NDTV Lifestyle Holdings, NDTV and joint venture partner Astro plan to launch a slew of niche channels in the lifestyle genre. NDTV Good Times is already a profitable channel.
"Now that the (NDTV sales) team is ready and NDTV wishes to take charge of its own destiny, we amicably agreed to exit." said Star India CEO Uday Shankar.
NDTV's executive co-chairperson Prannoy Roy said, "Working together with Star has been a great experience."
NDTV in its 2011-12 annual report said 2011 was a challenging year for the television broadcasting industry with pressure on advertising rates and total television ad market estimated to have grown by around 12 per cent during the year, less than the projected growth of 15 per cent.
The challenges are going to stay as the ad market continues to be sluggish. "In the short run, NDTV will have to bear the cost of running its own ad sales team. And posting ad revenue growth in a tough market would always be a challenge," a media analyst said.
Prior to Star, NDTV's ad sales duties were handled by Raj Nayak-promoted Aidem Ventures. The broadcaster did not renew the deal with Aidem in March 2011 and instead turned to Star India.
NDTV had outsourced its ad sales to Aidem Ventures for one year, after Nayak quit as CEO of NDTV Media to float his own company. NDTV had bought back Nayak and his team's 26 per cent stake in NDTV Media, a company that was handling the ad sales of the broadcasting company.
