Sun TV Network plans to invest Rs 150 crore on its soon to launch Bengali GEC Sun Bangla in its first year of operation. Sun Bangla is slated to launch in Q4 FY19.
Further, the broadcaster will invest Rs 30-40 crore on its second Tamil GEC Sun Life, which launched on 7 October.
“We will invest Rs 150 crore on Sun Bangla in its first year. On Sun Life, we will invest Rs 30-40 crore for the year,” Sun Group chief financial officer (CFO) SL Narayanan told analysts during a post-earnings conference call.
In the previous conference call, the Sun TV Network management had said that Sun Bangla will achieve break-even in 2-3 years.
Sun Bangla will have original commissioned content. The management has projected that the Bangla channel will achieve 10-12% viewership within a couple of years.
The Sun TV Network management has also said that the company has revisited its strategy on over the top (OTT) platform Sun NXT and will now invest in creating original content for the platform.
Sun NXT offers over 50,000 hours of live TV content, movies, originals, kid’s, and music across four South Indian languages Tamil, Telugu, Kannada, and Malayalam. The platform boasts of a library of 8000 films.
Narayanan said that the Sun NXT platform has started offering exclusive content in the form of film songs and trailers.
“We are revisiting our Sun NXT strategy. Earlier, we said that we are not looking at original content. However, we will start investing more and more into Sun NXT. We will have content that will premiere first on Sun NXT and then may or may not follow on mainline channels,” Narayanan added.
Sun TV Network president Mahesh Kumar said that the company is in talks with telcos to increase its reach through deals with telecom operators. Sun TV Network’s linear channels are already available on Jio TV and Airtel TV. The company is in talks with telcos for integration of Sun NXT into their apps.
“Sun NXT is in talks with telcos. We want to increase the reach then we will invest in content. We are in the final stages of concluding big ticket deals,” Kumar stated.
The broadcaster will invest Rs 275-300 crore in the movie business in FY19. Going forward, it intends to invest a similar amount in the movie business. The company has been selective about movie acquisition over the past three years.
“Movie has to make a business case. We simply can’t buy movies at any cost,” Narayanan said on being asked about the reason for not going after satellite rights as aggressively as it did earlier. He also said that the company re-allocated resources towards commissioned shows.
The management reiterated that it is eyeing an upside of Rs 350-500 crore in subscription revenue due to digitization in Tamil Nadu. “We should be able to realize the entire upside by end of this financial year,” Narayanan said.
He also said that the company will be able to implement new TRAI guidelines because it doesn’t have too many fixed fee deals. The company does content deals on a per subscriber basis.
Queried about the weak ad revenue growth, Kumar said that the ad revenue was weak due to three external factors. The Kerala floods which impacted ad revenue to the tune of Rs 7 crore. Dussehra last year happened in Q2 but this year it got shifted to Q3. This resulted in an impact of Rs 7 crore.
Furthermore, the company didn’t telecast ads during prime-time slots due to the telecast of former Tamil Nadu chief minister Karunanidhi’s funeral. This had Rs 3-4 crore of impact on ad revenue.
“We should have grown by 10% but the ad growth got impacted by three external factors. The decline in Sun TV’s share also played a part,” Kumar said. He expects the industry ad revenue growth to be 10-12%.
The broadcaster is currently exploring options with telcos to integrate the Sun NXT app with their mobile TV platforms to extend its reach. Sun’s OTT platform is already available on Jio TV and Airtel TV.