Another challenging year ahead for pay-TV players

[webfact]

NEW YEAR SPECIAL
Another challenging year ahead for pay-TV players
Watchiranont Thongtep
The Nation

BANGKOK: -- The arrival of digital terrestrial television last year radically changed the broadcasting landscape, including pay-TV business - and the year ahead looks set to be another tough one for subscription-based operators.

Last year's merger between GMM Grammy's pay-TV unit, the second-largest subscription player, and CTH, the third-biggest operator, reflected the reality that subscription-based TV business was being squeezed by the transformation of the industry.

However, TrueVisions - the leading pay-TV operator - said it had prepared a strategy to meet this challenge and expand its audience base, particularly among mass-market customers. The firm is also combining its strength with its affiliates in seeking further revenue from advertising.

Birathon Kasemsri Na Ayudhaya, head of commercial and business development at TrueVisions, said the company had an aggressive plan to expand its subscriber base into the middle to mass market.

"The growing number of [potential] mid-tier and mass subscribers means an opportunity for TrueVisions to gain more viewers. In so doing, the company will be able to extend an opportunity for local companies to advertise via this medium," he said.

A customer profile that is 30 per cent premium and 20 per cent mid-tier, with the remaining 50 per cent being mass customers, is "a good way to go", he added.

Though cable- and satellite-TV platforms appear to be challenged by digital-TV broadcasting, TrueVisions still believes satellite-based service is as important as the cable-based platform.

Satellite-based service is able to cover areas not reached by cable, but once cable-based service does reach those areas, "the picture and sound quality offered by our high-definition channels will be discovered by customers", he said.

However, the executive acknowledged that pay-TV would continue to be bombarded by both direct and indirect rivals, although there would be more room to grow in the wider market.

TrueVisions is also attracting new customers and retaining current subscribers by introducing value-added service through a rewards programme, he said.

The company has also set an ambitious goal of generating Bt10.5 billion in annual advertising income within two years, from just Bt450 million last year.

This ad revenue will come from TrueVisions and its two affiliates, Thai News Network - the operator of TNN24, a digital-TV news channel - and True4U channel, a digital variety channel run by True4U Station.

In light of the military regime's "digital economy" policy, CTH has set its sights on growth via expanding both wired and wireless broadband Internet by introducing an Internet protocol television (IPTV) service.

Chirdsak Kukiattinun, chairman of the company's executive committee, said this expansion would be conducted by its subsidiary, GMM Broadcasting - the operator of GMM Z Pay TV - and its business partner, Data CDMA Communication.

Under this partnership, both parties have developed and sell an IPTV set-top box called ZIPtv, which can work with both wired and wireless Internet service. On top of IPTV service provision, CTH is also focusing on satellite-based pay-TV service this year, with the company aiming for an additional million subscribers over the course by year-end, particularly prepaid customers.

The biggest challenge for CTH this year is how to break even from the company's huge investment in the media rights to English Premier League soccer matches. CTH paid about 200 million pounds (Bt9.9 billion) to acquire three consecutive seasons of EPL matches, from 2013-14 to 2015-16.

Meanwhile, the Cable and Satellite Broadcasting Association of Asia predicts that the pay-TV advertising market will continue to grow in the region, mainly driven by multi-channel television service. However, Mindshare Thailand believes otherwise as far as the Kingdom is concerned.

The media agency forecasts that in the next three years, digital terrestrial TV will account for 87 per cent of ad spending via television, while the remainder will be taken up by cable- and satellite-TV operators, including TrueVisions.

As to the size of the overall market, Nielsen (Thailand) estimates Bt70 billion in advertising expenditure via TV stations.

However, while this is based on key sources, it does not include in-house ads and small and medium-sized advertisers, as those sources contract directly with TV stations and other media outlets.

Nielsen's estimated ad spending via TV channels comes mainly from media agencies, therefore.

Source: http://www.nationmultimedia.com/business/Another-challenging-year-ahead-for-pay-TV-players-30251518.html


-- The Nation 2015-01-09

[cornishcarlos]

It will all be free soon...

Quite a few people have worked that out already

Xbmc ?

[apetley]

I'd be interested to learn how TRUE expect an over 20 fold increase in advertising revenue in only 2 years. Seems like a promise of replacing 'quality programming' with even more adverts and product placement to me.

[WitawatWatawit]

^^^ Note all the marketing speak/hype/BS. Sad. Never mind the quality, feel the width. These people should all be rounded up, put in a rocket and fired into deepest, darkest space.

[apetley]

^^^ Note all the marketing speak/hype/BS. Sad. Never mind the quality, feel the width. These people should all be rounded up, put in a rocket and fired into deepest, darkest space.

Pay per view event of the year!

[rotary]

TrueVisions has terrible programming and worse service all with a high price tag. GMM has less content but better in most cases at quite a cheaper price. I bet TrueVisions is a bit nervous.

[BudRight]

I'd be interested to learn how TRUE expect an over 20 fold increase in advertising revenue in only 2 years. Seems like a promise of replacing 'quality programming' with even more adverts and product placement to me.

They'll just keep raising prices and cutting channels as subscribers leave until there's one old lady paying 6 billion a month to watch gossip and mocking of people with Down syndrome.