Sun TV losing sheen? Sunset time for Maran?
Constant struggles of this once unrivalled satellite TV empire are getting more and more apparent. Dubbed as the Murdoch of South India, Kalanithi Maran couldn’t go wrong when he launched one satellite channel after another catering to different vernacular genre across South India. Of late, there’s been a reversal of fortunes with not just direct competition with deeper pockets from the likes of Zee and Star intensifying but also from the not so direct OTT players like Hotstar, Netflix vying for prime time. Ad revenues have been flat from the last year and this seems like it’s only a precursor to an impending steep fall.
None would forget that Maran’s prowess or acumen had always been overstated as they actually built their empire on the back of their association with DMK in Tamil Nadu through petty tactics like browbeating competition using their cable distribution clout from their family-owned Sumangali Cable. Now that DMK is in a downward spiral without winning an election for over a decade and is rife with the inter-family power struggle that clout is well gone.
Maran is out fending off competition on his own merits and that’s when his hyped-up entrepreneurial talent is getting exposed. Once considered a pioneer, Sun TV is now forced to do follow-ups with copycat shows from other rivals. BAARC ratings show they’ve already lost the battle in GEC, News segments in all languages barring Tamil GEC where their lead is only marginal and may give way anytime. Their beefed-up second GEC Sun Life also doesn’t seem to be helping much as the languish continues unabated.
Even assuming Sun TV makes the transition to OTT through their Sun NXT platform fairly successfully that’ll still not help them get back the past glory. Whereas Sun was the platform in the earlier avatar that content producers chose to showcase their works, in the new phase Sun will be reduced to a content producer and may have to share revenues with platform providers like Google Play or Apple store and worse still if they were to move to a platform like Youtube their share will be even lower.
Maran should only hope that someone of the nature of Netflix doesn’t turn their eyes on the vernacular medium yet as that’ll only accelerate the descent without providing any breathing space. Investors should check out as soon as possible unless they’ve got a compelling DCF valuation model based on high dividend payouts.
It’s no longer a growth story nor does it have any moat to sustain for long. Sunset time for Maran isn’t very far.
