Sun TV To Invest Rs 550 Crore In FY20

Sun TV Network will invest Rs 500 to 550 crore CapEx in FY20. The CapEx includes Rs 300 crore for movie rights acquisition, Rs 100 crore on movie production, Rs 35 crore on Sun Bangla, and Rs 100 crore for normal fixed asset addition.

Movie production would be around Rs 100 crore. Sun Bangla is around Rs 35 crore. The Network spends on satellite rights acquisition could be around Rs 300+ crore. And normal fixed asset addition anything will be Rs 50-75 crore or max Rs 100 crore

The company has not decided any launch date for its new channel, Sun Marathi. But there is some work happening, but it has not gone into a complete activity.

Sun TV is expected to invest approximately Rs 50-60 crore in Sun Marathi. Also, the group has big plans for its over the top (OTT) platform Sun NXT, which has crossed one million paid subscribers and is earning an estimated Rs 60 crore per year.

The Network is also in the process of finalizing a content deal with Reliance Jio. Recently, Sun NXT also partnered with direct to home (DTH) operator Tata Sky for its Tata Sky Binge service. Sun NXT is also being expanded through recruitment of new talent.

Sun’s profit in March quarter slipped 2 percent year-on-year to Rs 283 crore, despite a 24 percent increase in revenue at Rs 888 crore. Muted advertising and subscription revenue growth impacted earnings. At the operating level, EBITDA grew by 16 percent to Rs 608 crore and margin contracted 450 bps to 68.4 percent compared to the year-ago period. Numbers were far below analyst expectations. CNBC-TV18 poll estimates for profit were Rs 353 crore and revenue Rs 936 crore. EBITDA was estimated at Rs 675 crore and margin at 72 percent for the quarter.

Sun TV posted weaker-than-expected operating results, with advertisement and subscription growth impacted by the implementation of the New Tariff Order (NTO). Viewership market share of its flagship channel, SUN TV (Tamil), has remained subdued, while management expects incremental investments in original content to revive the market share going forward.

Advertising revenue growth was flat in Q4FY19 against expectations of 5-7 percent growth, while subscription revenue growth was 4 percent during the quarter against expectations of 15-17 percent.―BCS Bureau