New technology, new rules mean new era for broadcast industry

New content providers will jump in, which will whip up competition. More investment is foreseeable, to cater contents to all available channels to grasp as many viewers as possible, including those living beyond the country’s bor

ders. Seizing an early beachhead is the name of the game, as the Asean Economic Community (AEC) crystallises in 2015.

MEDIA LANDSCAPE REDRAWN

Advanced technology in cable and satellite television transmissions opened more doors for local production houses to enter the satellite TV

business while cable/satellite TV receivers became more affordable.

In the past three years, major music and entertainment players and television production houses turned their attention away from only producing programmes for free-TV to setting up their own cable/satellite channels.

GMM Grammy dived into this market by offering 10 free-to-air satellite TV channels and a satellite platform via GMM Z set-top boxes and pay-TV services for next year. Another music and entertainment giant, RS, will also operate four free-to-air satellite TV channels and a pay-TV service next year.

Workpoint Entertainment has its own satellite channel under the same brand – Workpoint TV. Chief executive officer Panya Nirankul said his company had also partnered with PSI Holdings – the country’s largest producer of satellite TV receivers – to introduce three more satellite channels next year.

Nation Multimedia Group has added three satellite channels – Krungthep Turakij TV for finance and business news, KidZone and Kom Chad Luek TV – to its portfolio.

Such changes also helped the penetration of cable/satellite TV to reach 65 per cent of all households. Next year, 70 per cent will be possible, said Adisak Limprungpatanakij, president of Nation Broadcasting Corp.

However, Nielsen (Thailand) found that 49 per cent or 10.9 million out of 21.8 million households nationwide still access free TV via antennas. This was followed by satellite TV with 6.8 million or 31 per cent, cable TV with 2.3 million or 11 per cent and TrueVisions’ network with 1.8 million or 9 per cent.

Advertising expenditures on television were about 60 per cent of the total Bt100 billion while cable/satellite was still low at 7 per cent of total ad spending via TV. Next year, the amount for cable/satellite TV is expected to rise to 15 per cent.

On the other hand, because airtime slots on free TV remain limited, particularly with the duopoly of BBTV’s Channel 7 and BEC’s ThaiTV3, while advertising demand is increasing, local broadcasters have more room to raise their rates by 10-15 per cent next year.

FIERCE COMPETITION AHEAD

Facing this challenge, cable and satellite TV operators continue to invest heavily in content development and imported content to lure more viewers away from free TV and more advertising.

TrueVisions is earmarking Bt5 billion to produce its own programmes and import international shows to retain its existing premium customers and attract new ones.

GMM Grammy is spending Bt1 billion annually on content development for its free-to-air and pay-TV services.

Cable Thai Holdings (CTH), a group of 300 local cable TV operators, appears to be the big spender for content in 2013 after acquiring the audio-visual broadcasting rights for the English Premier League for three seasons. This deal is worth about Bt10 billion.

Besides killer content, digitally advanced infrastructure for cable TV operators is also a crucial driver to broaden the subscriber base with high-quality services such as high-definition (HDTV) and "triple play" value-added services. Triple play refers to the provision of high-speed Internet, television and telephone services over a single broadband connection.

CTH plans to spend Bt1 billion upgrading its fibre-optic network throughout the country, replacing 3 million old analog set-top boxes with new digital ones next year. It aims to have 7 million subscribers by 2015, up from now 3.5 million.

TrueVisions will talk with its sister company, True Online, about jointly investing in a new hybrid fibre coaxial network and using the network to offer HDTV. The company is also set to partner with the same 300 local cable TV operators to expand its customer base to 3 million from 1.76 million now.

Therefore, the cable/satellite TV business will see more intense competition in the coming year.

 

DIGITAL TERRESTRIAL TV BEGINS

The conversion from analog to digital terrestrial TV, which is being shepherded by the National Broadcasting and Telecommunications Commission (NBTC), will play a key role in reshaping the industry.

The most exciting development in the transition is the auctioning of spectra to operate 24 commercial digital terrestrial TV channels, consisting of five standard-definition (SD) channels each for children and information programming, 10 SD channels for variety programmes and four HD channels also for variety programmes. There will also be 12 SD channels each for public and community services.

An industry observer predicts that commercial digital terrestrial TV broadcasting can help boost advertising expenditures because of the increase in channels.

This also gives more chances for local content producers to operate free-TV channels because under the licence-based regime, a broadcaster must have only two licences – one for spectrum holding and the other for operating TV stations. Though the licence fees remain unclear, all operating costs appear to be reasonably lower than under the concession regime.

The NBTC has designed four classes of licences for infrastructure, networks, services and applications. Facility and network licences are expected to be issued in the first half of this year and broadcast licences for public services in March.

According to the NBTC’s regulations on licensing for network providers and spectrum holders for the broadcasting of digital terrestrial television, after obtaining a network licence, a provider must cover at least 50 per cent of total households within the first year. Then, coverage must be expanded to 80 per cent in the second year, 90 per cent in the third and 95 per cent in the fourth.

Transmissions in municipal areas must be available for portable indoor reception.

Natee Sukonrat, chairman of the NBTC’s broadcasting committee, said the watchdog expected to begin auctioning broadcast licences for commercial channels in the second half of 2013 and grant the first licences by the end of next year.

GEARING UP FOR THE AEC

By the end of 2015, the economic integration in Asean countries will open more doors for Thailand’s broadcasting business. Forever BEC-Tero is an example. This company is a 50:50 joint venture of Yangon-based media giant Forever Group and BEC-Tero, a subsidiary of Bangkok Entertainment, the operator of ThaiTV3.

Through this JV, BEC-Tero Entertainment aims to make Myanmar its second base for television and radio production and the show business in Southeast Asia once the region becomes a single market in two years’ time.

Under this JV, BEC-Tero will co-produce television programmes for Channel 7 and for Forever Group’s existing media outlets. Forever Group operates free-to-air channel MRTV-4 and also offers 70 subscription-based TV channels, including 10 digital and seven HD channels.

The Thai partner will provide technical support and jointly produce TV dramas and morning talk shows for Forever’s free-to-air channels.

BEC-Tero is also in talks with other media companies in Indochina.

With an eye to the AEC, Prasert Prasartthong-Osoth, one of the country’s top tycoons and the boss of Bangkok Airways and Bangkok Dusit Medical Services, launched his first English-language lifestyle satellite TV channel, called IN Channel, to promote Thailand as a tourism and healthcare destination.

Prasert earmarked his personal investment of Bt150 million for the TV channel, which in the first phase is available only on TrueVisions’ network. By the middle of next year, it aims to broadcast IN Channel programmes via satellite TV to about 20 countries.