The Sun TV Management is confident of delivering 12-15% advertising revenue growth YoY over the next three to four years as business sentiment seems to have improved significantly with the initiatives by the current Indian finance minister, P Chidambaram. Management pointed to the 20% YoY growth in Q3 FY13 in advertising as an encouraging sign of things to come.
Sun TV has not increased its advertising rates since April 2011. Depending on business sentiment, there is a likelihood that advertising rates will be revised ahead of the festival season in September 2013. The last advertising rate increase in April 2011 was by 12-15%.
Sun TV’s advertising inventory is almost completely sold in its GEC and movie channels during prime time. However, non-prime time slots and other channels have significant inventory that can be used if advertising volume picks up.
Fast-moving consumer goods (FMCG) companies account for 55% of its advertising revenue. Local advertisers such as jewellers and textile companies account for 33% of its advertising revenue. The remainder is mostly made up of auto and telecom companies.
Sun TV charges around Rs43,000 for a 10-second slot for its primetime GEC channel. While this is 4-5x of what its Southern rivals charge, it is a fraction of the Rs250,000-300,000 that Hindi GEC broadcasters charge for 10 seconds in a prime time slot. Given Sun TV’s dominance in South India, the company therefore offers a compelling proposition to advertisers.
Tuesday, February 19, 2013
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