Chennai,Oct 4 (TruthDive): Sun TV advertisement revenue is not growing as it is losing out to rivals in Karnataka and Andhra added to the delay in digitisation in tier three cities as well as the threat of a CBI inquiry on the promoters.
Only in Tamil Nadu does Sun TV remain the market leader and thity percent of the revenue comes from companies that are based in the home state. Fortunately, these companies are doing well unlike many MNCs. Sun TV however reasons out that with an economy growing at 5%, it cannot hope to do any better.
Sun TV Network shares is down 16% for the last one year. Extending the digitisation deadline that was to finish in 2015 for tier three cities and 2016 for four tier cities means revenue from cable business has been delayed.
KAL cables which was denied clerance from Home ministry and asked to shut down has managed to operate with a favourable court order. Cable subscription revenue accounts for 30% of the Sun TV revenue. TRAI order limiting advertisement time for programmes led Sun TV to increase the rates and this affected the business but subsequently a court order has stayed it. In June ,Sun TV reported a flat growth when Hindi news channels reported a 13% growth on account of Lok Sabha polls.
Though initially many advertisers pulled out after rate increase, things are back to normal, say sources. Rivals are investing heavily in Andhra and Karnataka on inventory like purchase of movies and production of soaps. Auto sector and e-commerce has shown signs of revival.
Sun TV has eight million subscribers and hopes that this segment which in last fiscal grew by 26% would be more in the 2015-2016 fiscal and its DTH would grow more in coming times.
If TRAI order limiting ad time to 12 minutes per hour gets the court nod, Sun TV will be impacted as it cannot pass on the tariff hike to advertisers and subscribers.
Yet another litigation over Home ministry order too is important for the TV channel to be in the running.