Will the Sun keep shining on his TV

Via ET

Scene I: Mid-July 2006: Boisterous DMK cadres were swarming over the Anna Arivalayam complex, the party headquarters, as results clearly indicated that M Karunanidhi was all set to become the chief minister once again.

Suddenly, there was a big cry, ‘Kalanithi Maran vaazhga’ (Long live Kalanithi Maran), amid slogans praising Mr Karunanidhi and the party, and hailing the victory. A blushing Kalanithi Maran, CMD, Sun TV, was besieged by enthusiastic cadres, many of whom sought his autograph. After obliging a few of them, the shy media baron rushed back to his office, located within the complex.

Scene II: Mid-May 2007: A well-maintained BMW is parked there at its usual place inside Arivalayam. It is moved closer, just minutes before Kalanithi Maran is about to come down and get into the car. The driver, in his white uniform, is busy cleaning the exteriors of the vehicle.

A DMK party worker, who has just emerged from inside the office, walks close to the car and asks the driver, ‘Whose car is this?’ Finding out that it belonged to Kalanithi, he was amused — and surprised. “Oh, haven’t they (Sun) moved out yet,” he said aloud.

What a difference a year can make. For the Marans, one the undisputed media baron of the South and the other a go-getting communications and IT minister, the reversal of fortune couldn’t be more complete. First, there was the fracas over a controversial survey that a Tamil daily Dinakaran published which led to an attack on that publication and Sun TV offices. A week later, Dayanidhi Maran quit as the minister.

This was initially seen as a mere political move by the chief minister and his immediate family to ostracise the Marans. The subsequent developments easing out Sun TV from covering major political events concerning Mr Karunanidhi, and replacing it with Raj TV, DMK announcement of the launch of a channel ‘Kalaignar TV’ (as Mr Karunanidhi is popularly known among his partymen and followers), the aggressive buying of new film rights including that of ‘Sivaji’ — have since taken business connotations.

Maran’s Sun Network today controls close to 20 channels in the four south Indian states, which account for an annual television ad-spend of anywhere between Rs 1,000-1,400 crore. That’s not a bad business to fight for. While the media frenzy over the rift between DMK chief M Karunanidhi’s first family and his grand nephews, the Marans, may have died down, there is no wishing away the tension between the two parties.

And this has also led detractors of Kalanithi Maran to forecast a partial eclipse of Sun’s business empire. After all, the DMK chief has lent the party weight to a rival media channel, Raj TV. Raj TV, which had merely existed in the market plagued by lack of financial muscle for almost a dozen of years now, is seeing this as a golden opportunity to fish in troubled waters.

The promoters of the channel, four brothers — Raajhendhran, M Rajaratnam, M Ravindran and M Regunathan — not only moved in to fill the vacuum created by the rift between Mr Karunanidhi’s family and the Marans, they also made a political statement by joining the DMK.

The DMK’s first family has also roped in Sharad Kumar, who was earlier a stakeholder in Gemini TV and Udaya TV, the Telugu and Kannada channels which are part of Sun Network, and who subsequently sold his stake to Maran some time ago to spearhead Kalaignar TV. Hectic parleys are on with content providers to fill up slots for the channel, slated to go on air on August 15 this year.

The industry, including the advertising fraternity, is watching quietly. Will Sun withstand the onslaught, especially from the very own political party it has been accused of banking on for its growth in the past? While it is tempting to think that Kalanithi’s empire will be under threat, the reality is different. Sun is built on foresight, great content, and clever distribution. It has also bested many rivals like Star Vijay in the past.

During its 14 years of operation, Sun TV has seen the AIADMK rule the state for eight years, as against six years by the DMK, including the past one year. The only difference this time around is the fact that the opposition is now coming from within. And if political support alone would ensure business success, then JJTV and Super Duper cable network would have never folded. And Jaya TV must have grown larger than what it is.

Current ‘competitor’ Raj TV’s services for Kalaignar TV will only be to the extent of offering its teleport to uplink the new channel and nothing more. There is likely to be no room for sharing prospective revenues from Kalaignar TV, other than the fee to be paid for uplinking. So that’s that.

Now consider the strength of Maran’s team (all his college mates): his ability to gauge the audience’s pulse and great content. Kalanithi knows his customer. He has always known that the women and children control the remote at home. “You and me don’t count for watching television,” he had told ET a while ago.

The titles of mega soaps on Sun TV too are mostly feminine, in tune with the channel’s philosophy. Media planners and advertisers agree. “Great content, constant innovation and ground distribution have been the hallmark of Sun’s success. And its ability to leverage on its strengths has only helped it further,” says Punitha Arumugham, group CEO, Madison Media, on the growth of Sun TV.

Maran has also been a shrewd strategist. A few years ago, Zee TV and Star, which took over Vijay TV, launched in the South. In fact, the entry of Star into Tamil regional television market was seen as ‘an investing competitor’ entering the domain of Sun TV for the first time. “Let us see how many investments they (Star) bring in and what kind of a growth strategy they have,” Kalanithi Maran had said then.

Soon, he launched KTV, his second channel in Tamil. And Star Vijay ended up fighting with KTV, while Sun TV continued to grow by leaps and bounds. Sun TV not only withstood such pressure and established a 70-75% marketshare in Tamil Nadu, but also outgrew competition by expanding its base across the South. And the secret sauce for this growth recipe is believed to be SCV, the cable distribution network.

This is not the first time that someone will try to steal the secret sauce. The AIADMK government twice tried to unsuccessfully take over the cable operations of multi-system operator, SCV, a group entity of Sun, fully knowing that the cable network comes under the central list and not on the state list. The bill was subsequently withdrawn by the present DMK government soon after it came to power.

In today’s scenario, it is this distribution business that is attracting attention once again. If the rival Raj TV says it plans to start a parallel cable network, there are quite a few who are hoping against hope that the government may take over the ground distribution network. But it is easier said than done. SCV is operational only in six major cities in the state and it does not own the last mile anywhere.

That is owned by thousands of individual cable operators and they have been on Sun’s side partly because of politics but largely because of consumer demand for Sun. In fact, the previous AIADMK government itself, while moving the Cable Bill, had listed over half a dozen large MSOs with varied political backings across the state. But Sun was still available statewide. So, unless Kalaignar TV builds up traction, it will be difficult to upstage Sun.

To their credit, Kalaignar is trying hard. Until recently, it was Sun TV that was buying most of the new film content, with very little going the way of Raj, Jaya and Vijay due to their limited resources. Film-makers and content providers are happy that they have another strong channel to choose from. Even so, Sun Network is sitting pretty on a huge film library, relentlessly built for more than a decade, and running to over 12,000 hours

The TRPs of its prime time programmes continue to hold steady. “It is a kind of market where people are obsessed with television and their programmes. And it shows in TRPs,” says Ms Arumugham. “Political influence in any business is advantageous only where regulation plays a role. Otherwise, it depends more on how a business is run,” points out Prashanth Kumar, national trading director, Group M.

Maran was caught off-guard with the aggression of Kalaignar TV, which picked the satellite rights of a slew of movies, including the much-awaited ‘Sivaji’ and the successful ‘Mozhi’, among others, but it has responded quickly. It picked up leading star Vijay’s two movies - the super hit ‘Pokkiri’ and the under-production, ‘Azhagiya Thamizh Magan’.

Furthermore, Sun Network’s Kalanithi Maran is also busy giving the final touches to the group’s ambitious DTH venture through a separate company, Sun Direct. Tony D’Silva, formerly with Star India, has taken charge as the COO for Sun Direct.

While industry watchers say that Maran will be able to weather the storm because he has built a great business that exists even without political patronage, he himself is in stealth mode. “My results will prove my performance,” is all he is willing to say at this juncture. Not wanting to stoke the fire further, maybe. A shrewd businessman, he knows when to hold his breath and wait for the stars (and the sun) to fall in a favourable pattern again.