Sun Tv Network Expects Its Ott Platform To Generate Rs 100 Cr Rev In Fy21

Jyothi Venkatesh

TV broadcaster Sun TV Network is eyeing Rs 100 crore revenue from its OTT service Sun NXT in FY21. The company also plans to spend Rs 150 crore in the OTT business in the next 18 months. According to Television Post, the company has made significant gains on the digital front from October. After striking a deal with leading media group’s ad-based OTT platform, the number of subscribers for Sun NXT is now at 11 million and the OTT platform is garnering Rs 50 crore revenue. The management stated that the number of subscribers could reach 20 million by December 2019 after its deal with Reliance Jio fructifies. The management also disclosed that they have also been approached by global OTT players for content and are yet to take a decision on the same.

Sun NXT offers over 50,000 hours of live TV content, movies, originals, kid’s, music across 4 South Indian languages viz: Tamil, Telugu, Kannada & Malayalam. It has subscription-based plans as well as ad-supported free content. Sun TV Network witnessed muted growth in Q2 FY20. Ad revenue was down 1.5% at Rs 337 crore due to a weak economic environment. Subscription revenue saw 16.9% YoY growth aided by strong monetisation from new tariff order (NTO) implementation.

EBITDA at Rs 469 crore as against Rs. 553.97 crore on account of certain one-offs related to CSR and bad debt provisioning aggregating to Rs 33 crore and continued higher content spending. The management has also noted that its flagship Tamil GEC Sun TV has gained a 5-6% market share in the last five months. As a result, Sun TV’s market share has jumped to 44%. The company has also gained market share in Kannada and Telugu markets and expects to monetise the viewership gains over the medium term.

The company’s subscription revenue growth came on the back of NTO implementation as well as Tamil Nadu digitisation. Cable revenues were up 40% YoY to Rs 168 crore while DTH revenues were up 4% YoY to Rs 229 crore. With 4.5 million homes in Tamil Nadu still to go digital, the company expects the growth momentum to continue.The management also stated that it is on track to hit Rs 500 crore quarterly subscription revenue as it already has achieved Rs 400 crore number.

The company expects the cost of revenues to remain elevated going ahead due to incremental spending for content in Bangla GEC, continued spending for high-quality content for existing channels and commissions to distribution platform operators (DPOs) for channel distribution under NTO regime for preferential position and increased penetration. The management reiterated that the break even period for the Bangla channel will be about three years. The company is spending Rs 50 crore annually on creating original content for Sun Bangla.

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