For a media company that owns 18 television channels, seven radiostations, two daily newspapers, four magazines and a significantcable and satellite (C&S) distribution business, Sun Network'sheadquarter in Anna Salai, Chennai, looks quite unpretentious andquiet. There are no throngs of camera crews or reporters hangingaround. Instead, one finds some sturdy, tall men, all dressed inwhites, guarding the entrance. They are the only indication of theplace's central position in Tamil Nadu politics-the building is theheadquarters of Tamil Nadu's ruling party, DMK. The Chairman and theManaging Director of Sun Network, Kalanithi Maran, sits on the thirdfloor. At the reception, there is a big, illuminated portrait of thelate Murasoli Maran, former Union Industry Minister, nephew ofcurrent Tamil Nadu Chief Minister M. Karunanidhi and Kalanithi'sfather. The family is synonymous with politics, but Maran says: "Idon't understand politics; I only know how to run a successfulbusiness." That, he surely does.
Maran, 40, runs one of the biggest media conglomerates in thecountry, straddling C&S broadcasting, publishing, radio and broadcastdistribution; its current turnover: Rs 800 crore. The network'sflagship channel, Sun TV, is the second biggest in the country, witha 30 per cent market share, just below star Plus (41 per cent) in thenational pecking order. Maran's other channels rule the roost in eachof the southern markets-Tamil Nadu, Andhra Pradesh, Kerala andKarnataka-he is present in (see Where Sun Stands...). Sun is the onlynetwork in the south that has a complete bouquet of generalentertainment, news, music, movies and kids channels (a sports and adocumentary channel are on the anvil). In TN, his rivals, Jaya TVand Vijay TV (the latter is owned by the star Network), have only onechannel each with a viewership share of 6 and 3 per cent,respectively, against Sun TV's 44 per cent. Even his competitorsacknowledge his mettle. "Maran is one of the pioneers in thebroadcast industry. He has created a stupendous business in a marketthat others thought wasn't worth dabbling in," says Ajay Vidyasagar,Executive Vice President, star Network India.
Maran also has a flourishing publishing business that comprisesfour magazines Kungumum (with a readership of 1 million), Mutharam,Vannathirai and Kumguma Chimizh. He also runs two daily newspapers,Dinakaran and Tamizh Murasu. "At the time of acquisition, Dinakaranranked 60th in the country with a readership of 1.5 million. Weredesigned and relaunched the product. Today, it is the seventhlargest newspaper with a readership of one crore," says Maran. Then,he also has 45 fm radio licences; seven stations are already on air."Twenty-two of the new licences are for the northern market," hesays. "So far, we were a south-based player, but our radio venturewill make us a pan-India media company."
No Investments, Only Returns
His political linkages notwithstanding-Tamil Nadu Chief MinisterM. Karunanidhi is his great uncle and Union Minister for it &Communications Dayanidhi Maran his elder brother-Maran has built hisfortune from scratch. After dabbling in the family's publicationbusiness and running a video magazine, Poomalai, for about fouryears, he decided to enter the broadcast business in 1992. "The C&Sindustry was non-existent at that time. There were not too manyadvertisers and no cable operators, forget about subscribers andsubscription fees," says Hansraj Saxena, Vice President(Programming), Sun TV (Saxena is Maran's college friend who has beenwith him from the start). Investing in content production and amarketing network, thus, was a tall order. It was then that Marancame up with an innovative idea. "I approached some producers andproposed that I would provide my platform to air their shows; theycould retain the ownership of their content and sell commercialairtime to recover their costs," he says. Maran also got to sell sometwo minutes of air-time and title and sponsorship rights. It was awin-win proposition as Sun would earn profits on no investments. Thearrangement is now the standard practice at the company. Producers,on their part, don't complain because there is no better alternativeto Sun in the southern market. "Sun channels are far ahead of theirrivals in terms of reach and viewership, which translates intotremendous advertising potential," says Sathyajothi Thyagarajan,Managing Partner, Sathyajothi Films; he has been working with thegroup for the past 10 years. Indeed, the average lowest TRP(television rating point) a Sun TV programme gets is around 20,whereas the highest TRP rival Jaya TV gets for its most popular show,Jackpot, is 6. Today, all the top 50 regional C&S programmes belongto the Sun Network. Result: while a 10-second spot on Sun TV goes forRs 18,000-25,000, the going rate for competing channels is around Rs6,000-8,000.
This gives Maran the muscle to dictate terms to content producers;and he squeezes this advantage ruthlessly. He doesn't allow them towork for any other broadcaster, and those who leave him once arenever allowed to come back. He has similar contracts with leadingfilm producers as well. Says Maran: "Over 80 per cent of the filmsproduced in the market come to us. In return, we promote them on allour platforms before their release. Given our reach, it is anopportunity they can't afford to miss." This arrangement has workedwell for producers so far. Many TV content producers have builtfortunes riding on the back of his network. "Eight years ago, when westarted working with Sun, our turnover was Rs 1 crore; today, we area Rs 24-crore company," says B. Srinivasan, Managing Director,Vikatan Televistas, a leading production house that works across thefour southern markets. "Given the scope of work one can do across Sunplatforms, the apparent restrictive covenant doesn't harm any of us.I am currently working on four shows for different Sun channels. Idon't have the time, or the need, to knock on any other door," headds.
Politics and Business
There is, however, one party that gets hurt in the game-Sun'srivals. "(Maran's) team has a killer instinct. Being the firstentrants, they have captured every corner of the market. Now, nobodycan break the virtuous cycle they have gotten into," says K.Balaswaminathan, Vice President (Sales and Marketing), Jaya TV.Incidentally, one of the strongest pillars of Maran's broadcastbusiness is his C&S distribution network. Though Maran insists thathe only runs a multi-system operation under SCV and he has no last-mile network, his rivals say that his men control more than 80 percent of the C&S distribution market. "In TN, it is they (Sun) whodecide which channel gets carried and which doesn't," says a topexecutive of a leading broadcaster.
There are many who also allege that he has used his politicalclout to build his empire. Recently, allegations surfaced that hisbrother, Dayanidhi, had tried to coerce the Tata Group into sellingits stake in Tata-Sky to him. Maran, on his part, is unruffled bysuch allegations. "It is most convenient for my rivals to hide theirfailures behind my political connections," he says, adding, "I onlyfocus on boosting my business."
Range and depth apart, Sun TV, the listed entity that houses allTV channels, is today the most profitable broadcasting company in thecountry. Its operating margins have ranged from 45 to 60 per cent(against Zee TV and star's 25 and 35 per cent, respectively) over thelast four financial years. "Sun TV has created a unique businessmodel. Its horizontal and vertical business integration isunparalleled," says Farokh Balsara, Industry Leader (Media andEntertainment Practice), Ernst & Young.
Going forward, the Sun Network seems poised for a new phase ofgrowth. Once all his radio stations take off, he will become thebiggest fm service provider, along with Anil Ambani's R-ADAG(Reliance-Anil Dhirubhai Ambani Group), in the country. Radioadvertising represents an opportunity of Rs 300-350 crore. "We aregearing up to ensure that we garner maximum share in the radiosegment," says Saxena.
Then, his DTH venture is likely to be launched early next year;analysts expect at least 25 per cent of the total pay TV householdsto opt for the service. "DTH offers a two-way revenue stream for Sun-the pay revenue from other service providers like Tata-Sky and Zeeand, from the network's own operations," says a Mumbai-based equityanalyst. Besides, he has just turned his flagship channel Sun TV intoa pay channel; it reaches 95 per cent of C&S homes in TN alone and islikely to bring in additional revenues of at least Rs 15-18 crorenext year. The launch of new sports, kids and documentary channelswill further consolidate the group's position. And advertisingrevenues, which grew 32 per cent in 2006-and account for around 60per cent of the group's total revenues-are likely to grow at ahealthy clip of 14-15 per cent. "Overall, the Sun Network is enteringa healthy phase of growth," says the analyst.
For Maran, it is only the culmination, and also a fresh start, ofan aggressive, but judicious, journey. "I have never taken big leaps.I take small steps. For me, being the leader wherever I am is whatcounts," he signs off.
MARAN'S MEDIA EMPIRE
Broadcasting: Has 18 cable and satellite (C&S) channels under theSun TV umbrella-four in Tamil (Sun TV, KTV, Sun Music & Sun News),two in Malayalam (Surya TV & Kiran TV), six in Kannada (Udaya TV,Udaya Movies, Udaya Varthegalu, Udaya TV II, Udaya News & Ushe), sixin Telugu (Gemini TV, Teja TV, Gemini News, Gemini Music, GeminiMovies & Aditya). Plans afoot to launch a sports and a documentarychannel early next year.
FM Radio: Two companies, Kal Radio & South FM Radio, have 45 FMradio licences (23 for southern and 22 for northern markets); 7stations already on air.
Cable distribution: Owns SCV, a multi-system operator, and hasover 80 per cent market share in cable distribution in Tamil Nadu.Also owns Gemini Cable Vision, a dominant player in Andhra Pradesh.
Publications: Runs four magazines (Kungumum, Mutharam, Vannathirai& Kumguma Chimizh) and two recently-acquired newspapers (Dinakaran &Tamizh Murasu) under two companies called Kungumum Publications & KalPublications.
DTH: Has a licence for direct-to-home service, which is likely tobe launched next year.
THE MAN AND HIS JOURNEY
Name: Kalanithi Maran
Age: 40
Education: B.Com from the University of Madras; and MBA from theUniversity of Scranton, Pennsylvania, US
Career: Started in 1987 as a Circulation Clerk in SumangaliPublications, a family-run business that then published threemagazines. Today, he is Chairman & Managing Director of Sun TV, acompany that runs 18 cable and satellite channels
Business philosophy: Take small steps, no big leaps
Sun's market cap: Rs 10,500 crore
Family's stake in Sun: 90 per cent
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