While the judgment from Bombay High Court is awaited in NTO 2.0 challenge, Sun TV Network CFO S. L. Narayanan on Friday said that NTO 2.0 was an aberration and that Sun TV Network would try and work out a methodology, whereby Sun’s ARPUs are not impacted by the price control on cost of content. Sun TV is looking to figure out a way to make sure that whatever is a fair price to Sun TV, is limited to it.
The comment was made during the investor’s call post the announcement of the financial results for the quarter ending June 30, 2020, wherein Sun TV’s CFO SL Narayanan was questioned about the impact of NTO 2.0 on its numbers.
SL said that Sun TV’s strategy will be very tactical and very unique to its situation in the market place, but that Sun TV would figure out a way to do it. He further said that Sun would continue to keep investing in content, and therefore keep the subscription revenues at a very high level.
S. L. Narayanan, Sun TV Network Limited – Group CFO said, “So we will continue to keep investing in content and therefore, keep the subscription revenues at a very high level. I personally believe that there is substantial headroom to raise prices in the subscription business, though NTO 2.0 is something that is staring us all in the face. I personally believe that this is an aberration because this is the only country in the whole world where there is price control on the cost of content. I don’t think there’s any country in the world, where a statutory body like a regulator is putting limits on the ability of the content creator to price this product. So it’s sub judice. We don’t know which way it will come.’
He further said, “But we will figure out a way to make sure that whatever we believe is a fair price for us, is limited to it. Yes, we will ensure that without compromising on our salience in the marketplace and our goodwill with the customers, we will try and work out a methodology, whereby our ARPUs are not impacted. That assurance I can — how we’re going to do it is not something I’d like to discuss on a call like this because it’s very tactical, it is very unique to our situation in the marketplace, but we’ll figure out a way. I hope we get some relief from the courts because we have shown that this is not something, which is out of the ordinary. And we need to get a fair share of the value created in the whole food chain.’
When asked as to where Sun’s revenue would be 3-5 years down the lane, SL said, “It has been very clearly proved that Sun’s standing amongst the target market has been exceptionally strong because we’ve come out through NTO of last year reasonably well. And I’m really sure that we will get our view share of the value-added even if NTO 2 were to get implemented, although it is still sub judice.“