Sun TV to invest Rs 450 cr in buying movie rights

Net profit up 19% to Rs 197 cr on yr ago

Media tycoon Kalanithi Maran's Sun Television Network (Sun TV) on Friday said it was planning to invest close to Rs 450 crore for acquisition of movie rights for satellite broadcast. The move is expected to strengthen Sun's existing library of 11,000 titles — among the largest in the industry.

Chief financial officer S L Narayanan, in a conversation with Business Standard, said the acquisition of rights would be funded by internal accrual. The cash and bank balance of Sun TV for FY15 stood at Rs 759 crore, an increase of 25 per cent over the previous year. Sun TV is looking at possibilities of monetising its existing library, executives at the firm said.

Despite its legal wrangles, Sun TV's net profit for the April-June quarter rose 19 per cent to Rs 197 crore from a year ago. Subscription revenue saw an overall growth of 10 per cent, with cable TV revenue increasing 13 per cent and direct-to-home subscription up nine per cent year-on-year. Sun TV's stock reacted positively to the results, inching up 8.9 per cent on the BSE to close the day at Rs 336.55 a share.

Revenue for the quarter stood at Rs 691 crore, up nine per cent versus a year ago. Excluding the Indian Premier League business, the June quarter revenue showed a rise to 14 per cent, at Rs 594.5 crore against a year ago.

The group owns an IPL team called SunRisers Hyderabad.

In a tepid market, ad revenues for Sun grew 30 per cent to Rs 324 crore for the June quarter, with regional advertisers contributing to a third of this growth. Sun, for the record, is the dominant player in Tamil Nadu and ranks among the leading networks in the markets of Kerala, Andhra Pradesh and Karnataka. It broadcasts 33 channels in the four southern languages of Tamil, Telugu, Malayalam and Kannada.

In contrast to the trend seen among Hindi channels, Narayanan said that FMCG companies remained the dominant advertiser on Sun network, with over 50 per cent revenues coming from this category alone. Hindi channels have seen categories such as e-commerce, handset manufacturers, automobile and telecom emerged as dominant advertisers. E-commerce for Sun TV, on the other hand, is beginning to emerge, with Narayanan declining to give numbers.