Sun NXT, the over-the-top (OTT) streaming platform run by Sun TV now has over 2 crore users, with the majority acquired through the tie ups with telecom operators and other OTT players. The development was shared by SL Narayanan, group chief financial officer at Sun TV Network in the first quarter earnings call on Friday. Narayanan also said that the platform does host users “who have come organically” but “that number is very small.” However, the group CFO at Sun TV said that the organic users on the SUN NXT platform are “growing.”
Sun NXT Has “Impressive Collection of Content” Says Sun TV Group CFO
Narayanan said that Sun TV is “investing in movies” and that Sun NXT has a “hike” in its user base each time the company premieres a new movie on its OTT platform.
“If anything Sun NXT [has] got an impressive collection of content,” Narayanan said in the first quarter earnings call on Friday. “So, you get all our channels streaming live, and then you also have access to my entire library and you can choose a nonlinear option on these serials as well. So, to say that you know, there's no content on Sun NXT is absolutely facetious.”
Crucially, Narayanan said that telecom operators receive “restricted access” to Sun NXT portfolio and that the deals with the operators does not mandate Sun TV to produce fresh content for Sun NXT.
“We limit their (telecom operators) access to my library because you know, for the kind of price that we get, we don't open up the entire library,” Narayanan said. “We only give restricted access to our library because if they want to get the entire access, I'll be cannibalizing my own customers.”
In India, Sun TV has priced the Sun NXT monthly plan at Rs 99 while the quarterly and annual plans are priced at Rs 129 and Rs 489 respectively. It has to be noted that the telecom operators including Reliance Jio and Vodafone Idea offer its users access to Sun NXT portfolio through JioCinema and Vi Movies and TV respectively. However, the JioCinema along with Vi Movies and TV platforms are largely available to Reliance Jio and Vodafone Idea users for no additional cost.
Further, Narayanan said that a lot of users in its international markets including Malaysia, Singapore and Middle East are “now shifting” from Direct-to-Home (DTH) and cable subscriptions to Sun NXT. The group CFO at Sun TV said that the viewing habits are “changing” due to the pandemic with a “lot of North Indians” watching South Indian movies.
“Because the pandemic has actually prompted them to look for other options in content,” Narayanan said. “So, I'm very positive that you know Sun NXT will become a very important part of our total offering.”
Narayanan said that the “absolute moment of arrival” for Sun TV as a “digital power” would be when “every home in South India becomes the Sun NXT subscriber.” However, the group CFO at Sun TV said that the “holy grail” moment is still “some time away” due to the low penetration of high speed broadband. Narayanan said that the company would have “achieved a breakthrough kind of penetration” if it can even convert 1.1 crore users into “direct paying subscribers of Sun NXT.”
“Delayed Investment” in Sun NXT “Remains A Concern” Say Analysts
Sun TV on Friday announced its first quarter results for the period ended June 30, 2021, with the company recording Rs 810.10 crores in revenues in the quarter. The broadcaster operating satellite TV channels across multiple Indian languages said that the revenues in its first quarter translated to a 34% year-over-year (YoY) increase.
Meanwhile, multiple analysts have said that the investment delays by Sun TV on its Sun NXT platform “remains a concern.” Motilal Oswal Financial Services, an Indian diversified financial services firm, on Saturday highlighted that Sun NXT “continues to remain a key part” of the overall content strategy of Sun TV.
“Intensifying content investment to win market share is a key positive, but delayed investment in OTT remains a concern,” Motilal Oswal said in its note. “It (Sun TV) has delayed its OTT investment by two years, with no clear timelines.”
Similarly, Dolat Capital, a financial firm engaged in the trading markets on Saturday highlighted that the Sun NXT platform has been “throwing back healthy cash flows for Sun TV.”
“However, there has been persistent delay in investment in digital business by Sun,” Dolat Capital said in a note. “There had been disconnect and delays in intent vs. execution on digital several times. Delivery on digital would be critical.”