Sun plans to launch six channels in FY’12


31 Jul 2011
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Sun TV Network, India’s leading regional broadcaster, plans to launch six channels this fiscal and invest Rs 1.6 billion towards purchase of movies for telecast rights.

The Malayalam kids channel will be launched within a month.

“We are looking at launching 5-6 channels this year. The launch will be towards the end of the second or third quarter. There will not be much of a capital expenditure requirement,” Sun Group chief executive officer Tony D’Silva tells, while declining to reveal further details.

Sun TV Network has approval for 12 channels.

The launch of the ‘add-on’ channels will open up inventory and help combat any slowdown in the economy even as the company targets a 12-15 per cent growth in advertising revenue this fiscal. In the first-quarter ended June, Sun TV Network’s ad revenue grew just 4 per cent to Rs 2.31 billion, albeit over a high base.

“We should be cruising along to a 12-15 per cent growth in ad revenue. Even in a slowdown, advertisers will consolidate their spends on the leading broadcaster. We are also offering incremental inventory by launching channels,” says D’Silva.

Sun TV Network had introduced a rate hike in April. So why didn’t this reflect on a higher ad revenue growth? “In the first quarter of the previous fiscal, we had reported over 50 per cent growth over the earlier-year quarter. So the base was high. Besides, the rate hike for the non-GECs (general entertainment channels) will seep in gradually during the course of the year. And also let’s not forget that there were two big events – the cricket World Cup and the Indian Premier League,” explains D’Silva.
Subscription revenue from DTH will see strong growth. “We will be seeing a 15-20 per cent growth in this revenue segment,” says D’Silva. In the first three months ended June 2011, Sun had reported a revenue Rs 840 million from DTH, up 25 per cent over the year-ago period.
Sun’s strategy of buying movies for telecast will continue to be aggressive. “We will invest Rs 1.5-1.6 billion towards movie acquisition for telecast this fiscal,” avers D’Silva.

Sun TV Network’s operating income grew just 3.07 per cent to Rs 4.54 billion for the fiscal first-quarter. The company's net profit stood at Rs 1.88 billion, up 10 per cent from Rs 1.71 billion in the earlier year.

Will the setting up of Arasu cable by the Jayalalitha government in Tamil Nadu affect Sun’s revenues? “We have to wait till the launch of Arasu to comment on this,” says D’Silva.
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