Higher cable, satellite TV penetration to drive up ad rates
Next year, leading cable and satellite TV operators plan to raise their advertising rates by at least 20 per cent given the increased penetration of their medium in the Kingdom and high competition from new players.
By the end of this year, cable and satellite TV is expected to reach 65 per cent of the 22 million households nationwide, Nation Broadcasting Corp president Adisak Limprungpatanakij said, adding that in the next couple years it could reach 80 per cent.
RS chief operating officer Pornpan Techarungchaikul said that next year advertising on cable and satellite TV would account for 15 per cent of total expenditure on television commercials, which is estimated Bt60 billion. That will be up from 7 per cent this year.
Given this trend, RS plans to double its average advertising rates next year in an attempt to bridge the gap between terrestrial TV and cable/satellite rates.
She explained that advert spots on terrestrial TV cost an average of Bt50,000, while the most expensive spot offered by cable and satellite TV operators was just Bt20,000.
Workpoint Entertainment chief executive officer Panya Nirankul said that in the new year, his company would raise advertising rates by 10-20 per cent after Workpoint TV, a satellite channel, broke even within three months.
To exploit the trend towards satellite TV, last week Workpoint entered a Bt100-million joint venture with PSI Holdings, the country’s largest manufacturer and trader of satellite TV receivers, to launch three channels early in 2013. The new company, Freesize Broadcasting, aims to break even before the end of next year.
Besides higher penetration of cable and satellite TV, next year will also see new cable operators entering the market.
Last week GMM Grammy and Cable Thai Holdings (CTH) were granted pay-TV licences by the National Broadcasting and Telecommunications Commission. Today, GMM Z, a subsidiary of GMM Grammy for satellite and pay TV business, begins 11 pay-TV channels, while CTH will launch 120 pay channels early next year. As the NBTC allows a cable operator to run only six minutes of commercials per hour, Rathakorn Surbsuk, a trading partner at GroupM, told The Nation that with limited airtime available, prices would go up.
“We are certain that advertising costs will be increased by double digits next year,” Rathakorn said.
