Sun TV Network eyes stronger ad revenue growth in H2 FY22

The company saw record-breaking ad revenue growth in September-October, however, the ad revenue has de-grown by 19% in H1 due to a dip in Q1 FY22

by exchange4media Staff
Published: Nov 10, 2021 8:24 AM | 2 min read

The management of Sun TV Network expects to more than make up for ad de-growth in Q1 FY22 with a stronger growth in the second half of the fiscal year. The company posted a 40% growth in ad revenue at Rs 342 crore in Q2 and expects the momentum to continue going forward.

Speaking to analysts to discuss the Q2 FY22 results, the management said that the network has witnessed good traction from retail and new age advertisers. In terms of contribution, FMCG is the biggest category for the company with 55% share of total advertising followed by e-commerce (10%), retail (8%), pharma (5%), auto (4%) and others (18%).

The company saw record-breaking ad revenue growth in September-October, however, the ad revenue has de-grown by 19% in H1 due to a dip in Q1 FY22.

Despite a 4.4% drop in subscription revenue to Rs 403 crore in Q2, the management has asserted that the subscription revenue will see healthy double-digit growth in FY22 due to traction in digital revenue including sale of digital film rights. In Q1, the management had withdrawn guidance of double-digit growth in subscription revenue in Q1 due to uncertainty over NTO 2.0 implementation.

The management said that it expects strong subscription growth from DTH/Cable as well as OTT. Sun NXT sees an upsurge in subscription revenue every time there is a new film release on the platform. It also expects catch up revenue from distribution platforms to start coming from Q3.

The management also stated that the priority right now is to complete pending film projects rather than make fresh investments in original digital content for Sun NXT. It has pushed OTT investment to FY23, since it plans to invest more than Rs 250 crore on movies and Rs 450-500 crore on buying satellite rights of films. Sun has another four big-budget movies due for release soon. It is seeing good traction for Rajinikanth's 'Annaatthe'.

Sun Bangla, the management said, has gone past the investment phase and is close to breakeven. The Bengali GEC has seen good traction in ad revenue due to growth in viewership. On Sun Marathi, the management said that the channel will take 2-3 years to break even.

The company had invested Rs 55-60 crore in programming in Q2 and the content investment will remain at the same level.

Queried about unlocking the value of IPL team Sun Risers Hyderabad, the management said that it is open to spinning off the franchise as a separate entity, however, there are no such plans at this stage. Currently, the IPL team sits under Sun TV Network as a separate division.