Subscription revenues to be key driver; building infra for streaming: Sun Group
Sun TV has seen a dramatic recovery in ad revenue, but the recovery may not be sharp enough to recover the deficit of first six months, said SL Narayanan, Group CFO of Sun Group.
“We have seen a dramatic recovery of sorts. We saw a sharp recovery in the second quarter and Q3 has been even better,” he said in an interview to CNBC-TV18.
“But the kind of setbacks that we took in the first of the year – our first quarter numbers were down 65 percent and the second quarter ad revenues were down about 25 percent. So that deceleration in revenues is now baked in and I don’t think recovery will be so sharp as to recover all the deficits of first 6 months. So, for the full year, we are bracing for at least a 20-25 percent de-growth even assuming we do very well in Q3 and Q4,” he said.
Narayanan said that going ahead subscription revenues will remain the key stream for growth.
“I think subscription will perhaps become the mainstay of media companies like ourselves. 9 years ago when I joined Sun, our subscription revenues were averaging around Rs 85 crore a quarter which was Rs 340 crore run rate annually. That number has almost touched Rs 2,000 crore 9 years down the line and we are only seeing greater momentum in subscription. So, my own guess at this time is subscription will perhaps become the mainstay of media companies,” he said.
He also said that they have been working on building infrastructure for streaming segment in last 3-4 years and are looking at spending about Rs 200 crore on acquisition of content.
On original content, he said that they haven’t started spending on the originals due to COVID, but are looking to spend around Rs 400 crore on originals.