Sun TV Network to invest Rs 150 cr in Sun NXT over the next 1.5 years: SL Narayanan
MUMBAI: Sun TV Network plans to invest Rs 150 crore on its over the top (OTT) platform Sun NXT over the next 1.5 years, the company Group chief financial officer (CFO) SL Narayanan told analysts during Q1 earnings conference call.
Narayanan said that the company wants to invest in the platform since it has started making money. Sun NXT’s subscription revenue has stabilised which has encouraged the company to invest in it and take it to the next level.
“We are going to make investments in OTT. We are looking at something like INR 150 crore outlay for the next 1.5 years. So we will phase it. Now that it’s actually started making money for us because the subscription revenues are now stabilized at a very predictable level, we want to now invest back into the platform and build salients because, so far, we’ve been using it only as another method of accessing regular content,” Narayanan stated.
The company plans to launch youth-oriented content Sun NXT in the next 18 months. “So now I think as the time has come to put some really peppy, beautiful kind of content which youth can stack on, so that’s the plan for the next 18 months. We believe that we will invest about INR 150 crores on it. And so clearly, the strategy is to position something which is unique to the South Indian audiences, something which is built on the regional flavor. We believe we have a great understanding of what would sell among the youth audiences of the regions where we serve,” he added.
He also said that Sun NXT has seen a lot of downloads in the international market. The platform will also look to serve the diaspora through its content. “Plus also a variant of that is reaching out to South Indian diaspora around the world because we are increasingly seeing a lot of downloads of Sun NXT happening in the rest of the world. So some of the things that people really like to keep a tab on is what’s happening back in the home which they left. So there would be some programming which will also be oriented to serve that segment as well.”
The Sun TV Network Group CFO also stated that the company is prepared to make whatever investments it can make to grow the platform. “So there’s a lot of changes happening, and we need to make sure that we remain relevant and competitive in the markets where we are focused on. But we will — we have a very, very strong balance sheet. Whatever investments are required to protect whatever we have built, rest assured that we will be spending on that.”
For Sun NXT, the strategy was to first place the live TV on the OTT aggregator platforms. The second phase is to place Sun NXT on these platforms.
“See, if I need to explain this, what we first achieved was the placement of our streaming channels on these phones because everybody is now wanting to drive data usage by offering live TV. The second phase, which is a slightly more sophisticated phase, is the placement of Sun NXT, our OTT app, on these phone platforms which would be an additional revenue stream to the minimum guarantee that we’ve already achieved. And that will hopefully give us a much, much better penetration into the target market, which I’m told is approaching some 450 million smartphones, of which it is reasonable to expect at least 25% will be in South India,” Narayanan noted.
The company has three deals in place for Sun NXT and two more deals are in the works.
“See, we’ve not shared what money we are making from the telco platforms. And we don’t want to give because there’s a lot of sensitivity attached to those numbers because we have 3 different contracts, and we certainly don’t want too much of information out on the public domain. Suffice it to say that the digital ecosystem is actually rocking now, and we are expecting revenues to go up sometime — as I said earlier in the call, in the next few weeks, we will announce 2 major deals: one with a large telco for Sun NXT and another one which is an OTT platform which is being supported by a very large media house. We will position Sun NXT as an add-on there in addition to giving all our channels as live streaming options,” he stated.
Sun TV Network had earlier revealed that Sun NXT has crossed 1 million paid subscribers and is earning an estimated Rs 60 crore per year.