Sun TV’s real worries go beyond the family feud—its business woes run deep

As family feuds make headlines, Sun TV Network’s deeper issues run the risk of going unnoticed. While the intra-family dispute within the Maran household—the promoters of Sun TV—has sparked curiosity and media coverage, analysts and investors are increasingly focusing on the broadcaster’s underlying business challenges. From declining ad revenue and mounting competition to digital disruption and a stagnating regional television market, Sun TV’s problems extend well beyond the boardroom drama.

The Feud: A Distraction from Structural Woes

The family feud between Kalanithi Maran, the founder of Sun TV, and other relatives reportedly pertains to ownership stakes and future leadership succession. While such disputes often create governance overhangs, analysts warn that these headlines may be distracting investors from the deeper structural cracks in Sun TV’s business model.

“Family disputes are not uncommon in Indian corporate houses, but the bigger worry is the slowing engine of Sun TV’s core business,” said Mehul Desai, Media Analyst at BrightLine Research. “Even if the feud resolves tomorrow, the company faces existential questions about its future growth trajectory.”

Linear TV: A Declining Curve

Sun TV has long held sway in the southern Indian states with its Tamil, Telugu, Kannada, and Malayalam content. However, the linear television market, especially in regional segments, has reached saturation.

According to a report by Media Partners Asia (MPA), regional TV viewership has flattened in the last two years as younger audiences shift toward digital and OTT platforms. Sun TV’s flagship Tamil GEC (general entertainment channel) saw viewership declines of nearly 8% in FY24.

Moreover, the company’s overreliance on Tamil Nadu for revenue poses geographic concentration risks. While Sun TV’s Tamil content dominates the market, its channels in Telugu and Kannada lag behind local competitors like ETV and Colors Kannada.

Ad Revenues Under Pressure

Sun TV’s FY24 financials reflect this strain. Total revenue stood at ₹3,070 crore, up a marginal 3% YoY. However, advertising revenue—the company’s bread and butter—declined 4.5% YoY to ₹1,230 crore.

Increased competition from both legacy players like Zee and Star as well as new-age digital content platforms like YouTube, Instagram, and OTT services such as Netflix and Amazon Prime has created a fragmented ad market. Brands are now allocating greater budgets to digital, a segment where Sun TV has minimal footprint.

“There’s a fundamental shift in advertiser mindset,” said Shruti Venkatraman, a media planning executive at a major FMCG firm. “Sun TV still commands respect in Tamil Nadu, but in terms of pan-India appeal and digital engagement, it's behind the curve.”

OTT Play: Too Little, Too Late?

Sun NXT, the company’s foray into digital streaming, was launched in 2017 with much promise but has failed to gain serious traction. While its library includes legacy TV shows and some original programming, its subscription base is modest compared to Hotstar or Zee5.

As per estimates, Sun NXT has around 2 million paid users, compared to Hotstar’s over 50 million in India. Moreover, the platform lacks marquee exclusive content or sports rights that attract premium subscribers.

Analysts say the company was late to recognize the pivot toward OTT and continues to treat Sun NXT as a supplementary platform rather than a transformative business vertical.

“The digital pivot requires aggressive investment, tech partnerships, and original IP. Sun NXT appears more like a repurposed library than a true OTT contender,” said Arjun Tiwari, lead analyst at Capital Signals.

Film Business Fails to Fire

Sun TV also operates a film production and distribution vertical under Sun Pictures, which has had sporadic hits. While big-budget releases like Jailer (starring Rajinikanth) in 2023 brought windfalls, the pipeline of upcoming blockbusters appears thin.

The film segment, highly dependent on star-led projects and release timing, also saw cost overruns and marketing inefficiencies in recent quarters. This has created volatility in quarterly performance, making it harder for investors to forecast earnings.

Cost Controls vs Growth Investments

Sun TV’s management has announced cost optimization measures, including cutting non-core expenses and streamlining operations. However, critics argue that these steps may come at the expense of innovation and growth.

“Cost control cannot be the core strategy in a growth industry like media. Sun TV needs to reinvest aggressively into content and tech or risk becoming obsolete,” said Vishal Kapadia, sector strategist at InvestIndia Capital.

Market Response and Investor Outlook

Sun TV’s stock has underperformed the Nifty Media index over the past 12 months, falling nearly 14% compared to a sectoral gain of 6%. Foreign institutional investors (FIIs), once key stakeholders, have reduced their holdings to just under 10%, down from 16% in 2022.

Despite the gloom, some contrarian investors believe the worst may already be priced in. The stock trades at a PE of 10.5x, much below the sector average of 17x.

“There is deep value here if management can execute a credible turnaround—especially in digital,” said Rohit Maheshwari, fund manager at RainTree AMC. “But without a clear vision and leadership consensus, investors will remain wary.”

Sun TV’s troubles may have gained attention due to the family saga, but the real challenge lies in reinventing its aging business model. With changing viewer behavior, aggressive digital competition, and sluggish ad growth, the network must reimagine its content strategy, boost OTT investments, and diversify revenue streams.

Until then, investors would be wise to look beyond the headlines and focus on the fundamentals.