Only a few digital TV operators are expected to survive and flourish in the highly competitive broadcasting industry, and some are now adjusting business strategies to stay ahead of the others.
"The TV market is shaking itself up and will have a balance shortly," says Pornpan Techrungchaikul, chief operating officer of RS Plc. The potential survivors will be operators who can make a return on investment within two or three years.
The latest case of Thai TV Co, which failed to pay the second instalment of its auction fee, is just the tip of the iceberg, she said. Predictions are for more operators to suffer the same fate, and eventually go out of business.
Ms Pornpan says the case of Thai TV came earlier than expected. Many observers had anticipated some losers, as the 24 digital TV channels is seen as too many.
She believes the other digital channels will continue to fight by several means: adjusting strategy, adding attractive programmes, securing financial partners.
Six or so of the 14 variety channels (including both high and standard definition) will thrive in the digital TV arena, Ms Pornpan predicts. The rest won't necessarily go out of business, but some will struggle with profitability.
In the news category, only two operators will be prominent with lucrative profits, as they draw on a smaller segment of the audience.
Ms Pornpan says children's channels should be subsidised by the government instead of existing for commercial purpose because such programming is less attractive to advertisers.
Her assessments are based on global case studies in countries like the US, Japan, Indonesia and France, places where the TV business structure and environment are similar to Thailand's.
There are three factors to consider when predicting the winners: content, performance and business structure.
"TV is a media business that needs a lot of viewers," Ms Pornpan says.
Some 80% of digital TV failure can be blamed on TV operators themselves, she says, with the rest laid at the feet of the National Broadcasting and Telecommunication Commission.
Regulatory risk is another important factor that creates ongoing concerns and premium privileges. It's something operators should consider before joining digital TV auctions.
New TV operators must think carefully about a new paradigm of TV business model. Sharing a slice of advertising pie from the duopolies Channel 3 and Channel 7, which together control 75% TV ad spending, is not easy for the newcomers.
To produce a TV programme, the channel operator must make sure its content will hit viewers' minds. If not, it is like you burn a lot of bank notes, says Ms Pornpan. Therefore, TV channels must do a market research and a test run before broadcasting their content.
She says content can be divided into four categories that can draw mass viewers — soap opera, variety and game show, news and sports, each requiring expertise and huge investment cost.
The incumbents still have many advantages particularly stars, artists and novel screenwriters, while news requires expertise and better presentation. Sports is difficult to manage and acquiring rights can be expensive due to competition.
Kematat Paladesh, president of Bangkok Media and Broadcasting Co, the operator of PPTV channel, says after digital TV marked its first anniversary in April, the market is quite clear that each TV operator has its own direction and target viewers.
Channel 3 is a dominant among Bangkok and urban viewers, while Channel 7 still has the highest viewer number.
The newcomers mostly positioned themselves as premium mass and focus on urban viewers, such as Thairath TV, One, GMM Channel, Mono29 Channel and PPTV. Another group, RS's Channel 8 and Workpoint TV, is attempting to share viewers from Channel 7, which has been dominating rural areas for 40 years.
Mr Kematat says digital TV channels that want a big share of rural viewers need to invest substantially particularly on content production.
The last group delivers niche content such as business news-oriented channel Now26, sports channel True4U and Amarin TV, which specialise in home and living content.
Kanokkarn Prajongsangsri, managing director for investment and knowledge at media agency IPG, says Channel 3 and Channel 7 together had a combined 62% viewership in May during the prime time, down from 81% year-on-year, thanks to new digital TV channels. The viewership of Channel 5 and 9 has been halved to 5%.
Workpoint is the rising star with its latest viewership at 10%, followed by RS, One and Mono sharing around 3-4%. All in all, digital TV now share 30% of TV viewership. The success of the top 10 digital TV channels is mainly driven by content, identifying a clear positioning and viewer group, she says.