Sun TV targets 12-15% growth in ad revenue

Sun TV Network has set a target of 12-15 per cent growth in its advertisement revenue during the current financial year. It may be noted that the company has increased its advertisement rates by 12 per cent with effect from April 1, 2011.

During the quarter ended June 30, 2011, the company’s revenue grew by 3.08 per cent to Rs 453.99 crore from Rs 440.44 crore a year ago.

Addressing analysts on the first quarter earnings hosted by Enam Securities, the company management ruled out a foray into Hindi general entertainment channel (GEC) segment, but said it might look at other other regions if it gets a good opportunity.

“Though during the first quarter, non-GEC did not do well in terms of advertisement revenue and pressure was more on those channels, we would continue to launch such channels in this space. It is just taking a long time,” the company said.

On the capex front, the company would invest Rs 150-160 crore in the acquisition of satellite rights for around 300 movies, of which 30 per cent would be Tamil, according to V C Unnikrishnan, chief financial officer, Sun TV.

On its movie distribution business through Sun Pictures, the company said that before September, it would release two movies and another three or four in the next nine months.

Revenues from the movie business dropped to Rs 22 crore from Rs 48 crore a year ago. The company said this was mainly due to a decrease in the number of movies and a reduction in the ticket size. Around 100-110 movies are released in Tamil every year.

Sun has set a revenue target of around Rs 80 crore from overseas during the current fiscal, from Rs 69 crore last fiscal. “We have gone for multi-arrangements in countries like Sri Lanka, US, Canada and in the Middle East, which would help to increase the revenue,” the company said.