"I think we should be able to garner at least an additional 10 per cent of the GRPs (gross rating points) in the Tamil GEC space thanks to Sun Life within a few weeks of the relaunch," said SL Narayanan, Group Chief Financial Officer of Sun Group. The serials of Sun TV
are watched by families sitting together in a living room, the ethos of its content has always focused on family drama with a keen eye on quality to avoid anything that may be controversial. Hence there is a need for a flanking strategy to offer new age content on a totally different channel, to win over young Tamil viewers.
Sun Life is ready with four new programmes targeting youth, including Soppana Sundari (which means Dream Girl), a reality show modelled somewhat on the famous television show America's Next Top Model. The content is designed to be glamorous with the presence of Kollywood celebs and packed with lots of edgy moments among the contestants to create the excitement to hold the attention of viewers. Two other programs will be based on a talent hunt for new faces in comedy and dance while the fourth show is a competition that will go through several rounds of elimination to find out the most compatible couple.
"At present, our share of the Tamil GEC segment is a little less than 50 per cent. With the new shows premiering on Sun Life, we believe we should be able to garner nearly 60 per cent of the total market pretty soon. We have a powerful brand positioning and strong recall around the Sun TV logo. I am confident that Sun Life will reinforce our standing and take us to a new trajectory of growth in the market" he added.
In line with its ongoing plan to shift from an outsourced model to an in-house commissioning, all the new shows in Sun Life will be produced by Sun TV Network Ltd.
While most of the broadcasters has been operating on commissioned model, almost all the content in Sun TV historically was outsourced on a private producer (PP) model, by offering a part of the advertisement inventory to the producers to recover their cost. However, it has been shifting towards commissioned model lately and now about 20 per cent is produced in-house by the company. It has completely converted to commissioned model in the other languages i.e., Malayalam, Telugu and Kannada. In Tamil, it would take some time to convert the model, since the outsourced programmes are already running and hugely successful, and it would not be possible to pull it halfway through.
The company says that it could hold the Intellectual Property with itself if it is on commission basis, the content can be reused without going back to the producer. Besides, the entire airtime would be at the disposal of the company, with almost 12 minutes in an hour, as against four minutes in the outsourcing model. Under the commission model, instead of offering ad inventory, the company will pay a fixed sum for content cost which will help it to have the ad inventory and content IP with itself.
According to a research report by Motilal Oswal Securities Ltd, published earlier this year, the commissioned model would offer a 20 per cent earnings before interest, tax, depreciation and amortization (EBITDA) per hour on certain instances.
"Assuming Rs 300,000 content cost/hour, and pricing of Rs 5,000/10 seconds, the commission model would offer 20 per cent higher EBITDA/hour on a 12-minute ad inventory/hour. This goes up to over 60 per cent if the content garners good ratings and receives ad pricing of Rs 7,000/10 seconds," it said. Narayanan refused to elaborate on specific numbers but confirmed that the company will be able to maintain its historical operating margins. " We have several levers to manage fresh investments without diluting our profitability ratios" he added.
Even on a stable state basis, the EBITDA/hour for the commissioned content is superior to the private producer model and the upside could be far higher if the content becomes popular. Further, SUNTV would retain the content IP, allowing it to monetise on it's Over The Top (OTT) platform or other time periods.
As reported earlier, the company is also in the process of launching a second GEC channel in Telugu and foray into the Bengali and Marathi markets soon.