Media Sector

Media Sector
- NBTC to start auction, soonest in mid-December
In NBTC's sales of bidding envelopes for 24 digital TV channels auction, 33 companies
purchased 49 bid envelopes: 1) 12 envelopes for Variety HD (7 channels), 2) 17
envelopes for Variety SD (7 channels), 3) 12 envelopes for news channels (7 channels),
4) 8 envelopes for children channels (3 channels). There are more companies
purchasing bid envelope than the number of the channels. SD Variety was auctioned
with the most bid envelopes due to its inexpensive initial price (B380m) and freedom to
broadcast any programs and advertisements. However, total number of bidders cannot
be concluded by amount of envelopes sold. The application dates are 28-29, which
collateral must be paid at 10% of the minimum bidding price. Qualified bidders will be
named within 45 days after 30 October. The soonest for the auction to take place is in
mid-December 2013 but within mid-January.
- Mid-small newcomers at disadvantage, facing more broadcast cost
Original free analog-signal TV entrepreneurs are likely to face fierce competition, as new
entrepreneurs are seizing advertisement revenue, pressing advertisement price rates to
rise with more difficulty. However, with BEC and MCOT's capital, they are likely to win
the auction for at least 2 channels (Variety HD and Variety SD). This would boost their
service potential and compensate for advertisement price rate that is likely to stay
unchanged, especially for original entrepreneurs with strong contents and market share
like BEC, making it advantageous. BEC's original concession contact has still covered
BEC analog-signal channels until 2020, enabling BEC to reach more audiences than new
entrepreneurs. MCOT has weaker contents and market share, having 7% audience base
(BEC has 35%). Though MCOT benefits from digital TV network to compensate for True
Vision and BEC's concession revenue that will end in 2019 and 2020, the business would
takes 5 years to make a breakeven.
New entrepreneurs (RS, WORK, GRAMMY, NBC) have potential on strong contents on
satellite TV business. They might significantly benefit from high advertisement price rate
on digital TV channels, compared to advertisement price rate on satellite TV. RS and
WORK seem the most outstanding, as RS bid for Variety SD to advance from satellite TV
business and gain more advertisement revenue. Moreover, RS has right to broadcast
2014 World Cup, implicitly boosting its profit base. WORK bid for 2 channels (Variety HD
and Variety SD). WORK's 2H13 earnings result is likely to benefit after revenue from
Channel 6 on satellite TV (partnering with PSI since June 2013) is recognized, as well as
major events: Thailand Got Talent 3, The Voice 2 and Roi Muea Sang Mueang.
- Upgrade to "NEUTRAL". Top picks are RS, WORK
Though advertisement revenue during first 7 months grew by only 1.3%, not likely to
grow over 3% this year, 24 digital TV business channels (broadcast in March 2013)
would boost the advertisement revenue high. We upgrade to "NEUTRAL". RS and WORK,
which have strong content but lower revenue base than original free analog-signal TV
entrepreneurs, are likely to benefit most from digital TV due to increasing content
production and service potential. Top picks are RS([email protected]) and WORK(FV@B38). For
WORK, we upgrade from "HOLD" to "BUY". For BEC(FV@B78), we reiterate "BUY", as it
is the station with the strongest audience base and contents, but its future profit base
growth is not as significant at RS and WORK , as its profit base is already high and its
advertisement time has been occupied. As MATCH did not participate on bidding and
there is no progress on studio construction, we derive down MATCH's fair value from
B5.05 to B3.90, excluding added value from new studio, reiterating "BUY".