Broadcasters, content-providers fret over digital licence payment plans
Broadcasters and major content providers are generally in favour of the planned methodology of the upcoming licence auction for commercial digital TV channels, but some have concerns over the proposed payment terms.
A draft of the regulations governing the spectrum auction of 24 commercial channels was recently approved by the broadcasting panel of the National Broadcasting and Telecommunications Commission (NBTC).
However, there are still concerns that broadcasters may be at risk in the first year after the licences are granted, particularly in the high-definition (HD) category.
MCOT chief financial officer Jessada Promjart told The Nation that the reserve price for an HD licence, Bt1.51 billion, was too high – almost four times the starting price of a standard-definition variety channel. And the final bid could be even higher.
“If it secures such a licence, the company might face difficulties in cost management, particularly on how to set reasonable advertising rates between HD and SD channels,” the CFO said.
Underlining the same point, GMM Grammy chairman Paiboon Damrongchaitham said the reserve price for an HD channel should not exceed Bt1 billion. Each TV operator will face additional costs to run the digital station, such as for network leasing, production, annual licence fees and contributing to the NBTC’s Research and Development Fund.
Paiboon added that he did not agree with the payment terms mandating that each licence holder must pay 50 per cent of the reserve price in the first year. This amount seemed extremely high while the penetration of digital terrestrial TV in the country was still low and would not yet be a significant factor to lure advertisers away from the old analog platform.
According to the draft, licence holders would have three more years to pay off the rest.
He suggested that the payment terms should be set in line with the real penetration of digital coverage. The NBTC should seek other means to subsidise 22 million households’ access to digital TV, on top of the proposed discount coupons, to broaden the coverage area faster.
Meanwhile, other potential bidders insisted that they needed to know exactly what costs they would face for leasing digital terrestrial TV networks before deciding whether to join the auction.
Executives from IPM Satellite Television, Workpoint Entertain-ment, Freesize Broadcasting and Cartoon Media told The Nation that network-leasing costs and the penetration of digital terrestrial TV were key details they needed before joining the coming bid.
