Sun TV seals deal with Arasu at Rs 3cr a month

CHENNAI: Business and politics make strange bedfellows. The latest example is the deal between AIADMK-led Tamil Nadu government’s cable service provider Arasu and Kalanithi Maran’s Sun TV Network. The agreement, reached after year-long negotiations, will ensure that all Sun channels are now available on the Arasu network.
“The final discussions were held on July 26 and the agreement was signed on Monday," Arasu Cable TV Corporation managing director S Vivekanandan told TOI. Stating that the agreement is valid for one year, he said the Sun TV group will offer 37 channels to Arasu with immediate effect. Government sources said Arasu will pay nearly 3 crore per month to Sun Network. Though started by the previous Karunanidhi government after the feud within the DMK first family, Arasu failed to make much impact and was allowed to fade into oblivion. On her return to power, chief minister J Jayalalithaa revived its operations in a bid to end the monopoly of private cable operators. After its re-launch , the Arasu Cable made available 90 channels, including some pay channels, at a monthly charge of just 70, to subscribers.
However, Sun channels, which enjoy a dominant market share in terms of viewership ratings, were not available on the Arasu network. Following public demand, Arasu officials held talks with Sun TV management.
Sources said initially the Sun TV group demanded 17 crore for its channels. However, the state government was not willing to pay the amount and a series of meetings were held before a deal was struck last Monday. “We are pleased with this development as it brings the negotiations to a mutually beneficial closure,” Sun Group chief financial officer S L Narayanan told TOI. Stating that Sun TV has for long been a household name in the state, he said, “We are happy that all our channels will now be officially available on the cable networks served by Arasu.”
Industry sources said the Sun TV group will also start earning additional advertisement revenues through this agreement. According to a report released on Tuesday by Edelweiss, a stock broking firm, the deal is structurally positive for Sun TV as both its subscription base and ad revenues are likely to benefit from it. “In the absence of a deal with Arasu, Sun TV analog subscription revenue had declined by 24% year-on-year in the financial year 2012,” the report said. The deal will also be positive for Sun TV’s ad revenue, which had dipped by 3% yearon-year in the financial year 2012, owing to slowdown in ad growth as well as drop in viewership due to rising competition and lack of transmission on Arasu’s network. Arasu claims that 95% of all cable operators outside Chennai are in its fold. It also claims a subscriber base of 55 lakh with 20,000 cable operators under its umbrella. The revenue collection per month for Arasu Cable is about 9 crore.