Tough times for analog free-TV operators as advertisers tighten belts

An analyst at KKTrade, a member of the Kiatnakin Financial Group, forecast that Modernine TV channel operator MCOT would face a 79-per-cent loss in the third quarter – the worst in a decade. KKTrade said this was the result of a decline in advertising spending at Modernine TV. 

It said some advertisers opted to allocate budgets for only some digital terrestrial TV broadcasters or free-to-air satellite TV channels with high ratings. MCOT also had to shoulder additional operation costs – about Bt100 million quarterly – from its new digital channels including MCOT HD and MCOT Family.

“To reduce further investment on content, the company is in talks with leading TV broadcasters in India and France to exchange TV programmes,” Busaba Srirattanakorn, senior vice president of MCOT, told The Nation.

She added that under this barter scheme, the company had prepared a number of documentaries and other shows that had been produced by its subsidiaries including Panorama Worldwide and SeedMCOT. 

KKTrade also forecast that BEC World, the parent company of the Channel 3 operator, would face a 28-per-cent year-on-year loss in the third quarter – the worst in almost three years. 

It said BEC World was bearing additional costs, about Bt317 million, from its three newly obtained digital channels (3HD, 3SD and 3Family). Though Channel 3 is no longer a free-TV service to be aired on any platform, its operator Bangkok Entertainment can continue to broadcast through cable and satellite platforms. 

The company was recently given permission to simulcast its analog TV programmes on the 3HD channel of its affiliate BEC-Multimedia. 

The 3HD digital terrestrial channel is defined as a free-TV service by the National Broadcasting and Telecommunications Commission.

Surin Krittiyaphongphan, executive vice president of Bangkok Entertainment, said in a separate interview previously that this simulcast meant Channel 3’s revenue would meet expectations.

However, Surin admitted that there was the possibility of a negative impact on BEC World’s financial result as it had lost 3HD business opportunities while advertising spending in digital terrestrial TV remained limited by the low number of viewers. This week the NBTC started redeeming the Bt690 vouchers for purchasing either a digital set-top box or TV set with built-in digital tuner. But at press time, of the 4.6 million vouchers given away to eligible households in 21 provinces, only about 100,000 had been used.

In the first five months after the launch of digital terrestrial TV, Nielsen (Thailand) found that the 10 biggest spenders splurged more than Bt94 million in total on promotions and advertising. The top five were Springnews TV, PPTV, Mono 29, Thairath TV and Workpoint Creative TV.

But along with facing intense competition from new players, digital terrestrial operators also faced sluggish advertising spending in the first nine months, with the total spend falling from Bt84.19 billion to Bt76.29 billion year on year – a 9.33-per-cent drop.