However, Arasu cable has not been very successful due to factors like high tariffs, low local operator participation and delay in licence from Central Government. Arasu Cable was shut after the spat ended but was again revived in 2012 after the AIADMK, the main opposition party came into power and looked to undermine Sun TV cash cow. Due to a family spat, DMK, heading TN government brought about its own cable company called Arasu Cable in 2008, looking to nationalise cable television (like it did with alcohol distribution) and get even with the promoter family. This move is also an indicator of growing competition among TV channels in the south markets.Ī cable monopoly cannot function without political backing, and political upheavals have had a major impact on its cable operations (non listed part). Its only recently that Sun TV has pivoted to commission model, followed by the industry, where Sun TV buys the rights of a show outright and profits through advertisement revenue. This can further be illustrated by its business model – for the longest, Sun TV was the only network that followed private producer (PP) model, whereby it charged a fixed fee to a content producer for a slot on the network, with the content producer taking the inventory risk as the advertisement revenue went to him (30minutes programming / 3mins ad slot). This resulted in Sun TV, the flagship channel, having a numero uno position in terms of viewership in all of India, since it was the recipient of the best content in Tamil and other south Indian languages along with getting its pick of the regional movies in the form of perpetual licences (11,000 movies in library) Although financially not large, Sumangali Cable serves as a critical platform for Sun TV, since through its MSO, not only is the company able to keep a leash on the local cable operators, but it also accords preferential treatment to channels under Sun TV, and is also alleged to have resorted to unfair means for this preference. Apart from the listed business, promoters of Sun TV also own Tamil Nadu’s largest MSO Sumangali Cable. Keeping the above in mind, its only with a sense of wonder that one starts to appreciate how Sun TV upended this model to create wealth. This was the genesis of digitization (set top box essentially tracks channel feeds) Residents got cheap cable and a cable operator got fat profits, with the loss borne by the preceding value chain – MSOs, broadcasters and content producers. Cost to the local TV operator to add a household was near zero since all he had to do was attach a wire to the existing feed, with MSO having no way to determine the actual number of viewers since cable feeds, like airwaves could be reshared indefinitely.
Same ingredients made a local operator as profitable as Buffett owned CapitalCities – significant operating leverage. Channel broadcasters would give channel feeds to MSOs (the regional cable operators) who further rent these feeds to the local cable operators responsible for connecting individual households.Ĭable TV business at the local level in densely populated areas of top cities / towns had largely been an enterprise with criminal aspects like strong arm and meaningful links to the local politicians. Sun TV started its operations at the time when channels were broadcasted to viewers through cable TV. Its promoter, Kalanithi Maran, is a nephew of M Karunanidhi, the late patriarch of DMK, one of the 2 main regional parties in the state of Tamil Nadu. Sun TV offers below bouquet of channels -Ĭompany has had interesting origins.