Sun TV Network is planning to invest around Rs 150 crore in over-the-top (OTT) content over the next 18 months. The company is expecting its advertisement revenue growth to be in the mid-single digits during this year owing to a downturn in the industry. The company has started making money from its OTT platform Sun NXT, which has been used as another platform to put on its regular content.
The strategy is to position something unique to the South Indian audience, in India and overseas. It would not be big-budget programs or with high expense, but more of short-format content that could be consumed on mobile or smaller screens on the go. Besides, the movies that the company is purchasing satellite rights for, also have an agreement for the digital platform. The company has a budget of around `300–325 crore for movie purchases during this year and this might go up if there are any big movies coming up in the second half of the year.
The company will also announce a deal with a large telecom service provider and another with a major OTT platform supported by a media house to offer Sun NXT as an add-on in their platform. Options are also there to live stream its channels with these service providers. The company has been in talks with Reliance Jio to offer its content in the telecom major’s streaming app. It has already tied up with some of the other telecom service providers and has been receiving revenue from these models.
The digital revenue is currently part of its subscription revenue. In March this year, the company had announced that Sun NXT app is seeing over 20,000 downloads per day and has been bringing in monthly subscription revenues of `5 crore then, without infusing much into exclusive content, which means a revenue of `60 crore a year from the platform. The company maintained that the outlook for advertising revenue is challenging. Advertisement revenue for the quarter ended June 30, 2019, was at `368 crore.
“We should not expect anything spectacular during this calendar year at least. If the monsoon turns better, things will pick up with better spending from rural economy. The outlook for advertising is challenging and the company is expecting mid-single-digit growth this year, given the current situation in the market. Retail trade in Tamil Nadu has been very cautious; generally there is a big push of advertisements this month, Aadi”.