Sun TV to invest around Rs 600 cr in movies and content for OTT platform

Commenting on the advertisement market, the company said that in October advertisement revenue recovered to over 80 per cent of pre-Covid levels

Media tycoon Kalanithi Maran-owned broadcaster Sun TV is planning to invest around Rs 300-400 crore in the movie business and another Rs 200 crore in SunNxt, the company's OTT platform.

With gradual opening of theatres in the short term, Sun TV is planning to push the pedal in the movies business.

During the analyst call, company's management said that they would be investing in some big ticket movies, which will feature actors including Rajanikanth, Dhanush, Suriya and Vijay among others. Sun is planning for eight big budget movie releases starting from January 2021 till next Diwali.

The company plans to recover the entire cost of the movies from theatrical releases, while broadcasting and digital rights will drive profits. Sun believes preference is much higher for movies in south India compared to original content and hence, it is focusing more on movies.

The company is looking to invest Rs 200 crore in original OTT content in FY22 with releases starting in H1FY22. SunNxt revenue and viewership have continued to improve and it has 18 million active viewers.

Commenting on digital, the management believes DTH revenue can grow in double digits even in FY22, while cable revenue growth could be in single digits. Sun TV sees regulation on channel price as an issue.

Commenting on the advertisement market, they said, in October advertisement revenue recovered to over 80 per cent of pre-Covid levels and has been improving month on month.

Regional advertiser share is only 5% currently (33% earlier) and will normalise as economic activity improves, said the management adding that ad revenue mix included FMCG 68%, auto 8% and rest others.

Sun TV's profit for the  quarter ended September 20, 2020 stood at Rs 345.91 crore as against Rs.366.51 crore for the previous quarter ended September , 2019, a drop of 5.62 per cent.

Revenues for the quarter was at Rs 756.16 crore as against Rs 773.93 crore for the corresponding quarter in FY20. The total income for the quarter  was at Rs 807.71 crore as against Rs 846.07 crore in Q2FY20. Subscription revenues for the quarter was up by 14 per cent at Rs 427.04 crore as against Rs.375.65 crore in Q2FY20.

EBITDA for the quarter was higher by 7.10 % at Rs.502.03 crore as against Rs.468.74 crore in Q2FY20.