Do touch that dial

GMM Grammy expects digital TV will transform the company from a mere airtime renter and content provider into an owner of mass media

Paiboon Damrongchaitham, the chairman of GMM Grammy Plc, the country's largest entertainment company, carries a big smile on his face these days, as the last piece will soon be placed in his business jigsaw puzzle.

He has been waiting 15 years for digital TV. Grammy will bid for three digital TV licences in September or October and expects to pay as much as 4 billion baht.

Digital TV will help transform Grammy from a mere airtime renter and content provider into an owner of mass media. And the new operation will support its existing satellite- and pay-TV business.

"We're confident our 30 years of experience and skills in the entertainment business, from upstream to downstream, will help us enter digital TV. We have the biggest content library in Thailand and intend to make full use of it," said Mr Paiboon.

Grammy's strategic direction over the next three years is gearing towards TV, driving annual revenue to 20 billion baht in 2015 from nearly 12 billion last year.

The company's net profit margin will double or more, to 30-40% in 2016 from 10-15% last year. Its new business unit will oversee TV home shopping (the O Shopping Network), satellite TV and digital TV, while the existing core business of music and related activities such as films, live entertainment, events and digital media will be retained.

The company is selling off its non-core businesses to support the digital-TV bidding. Sold already is its 22.12% stake in Matichon Plc for 470 million baht, while its 34.93% holding in Post Publishing Plc will soon go.

Mr Paiboon said the three digital TV channels Grammy is interested in are in the categories of children's programming, high definition (HD) and variety (in standard definition)

It has obtained partners for the children's and variety channels and plans to operate HD itself.

Mr Paiboon said digital TV is seen as very attractive since the existing free channels together account for 60% of total ad spending of 100 billion baht on all media outlets. Having 24 digital TV channels means TV ad spending will grow enormously.

Grammy began its satellite-TV operation three or four years ago and now has 10 channels. Later, it sold satellite-TV signal receivers to create its own platform for the Euro 2012 football tournament a year ago.

Now, its GMM Z satellite-TV unit is promoting pay services in addition to set-top boxes, claiming its packages are widely affordable for viewers at 1,999 and 2,999 baht a year.

Fahmai Damrongchaitham, Mr Paiboon's eldest son and GMM Z's chief operating officer, said pay TV has vast opportunities since only a few operators are in the market.

The two newcomers Cable Thai Holding and GMM Z are competing on lower prices, while the market leader TrueVisions offers more expensive packages.

Mr Fahmai said only 10% of the 22 million Thai households subscribe to pay TV. That proportion could grow to half of all households and become like a basic public utility such as electricity or water.

Grammy has not paid a dividend to shareholders for two years due to its big investment in satellite TV.

Last year, the company posted a net loss of 347 million baht, the first time in 30 years it fell into the red.

But Mr Paiboon is optimistic the satellite- and pay-TV operation will break even next year and turn a profit in 2015.

Grammy will rent six more transponders of the Thaicom 6 satellite in August and start selling its content to other operators in the fourth quarter.

"My focus now is on TV, but I still want my own newspaper in the future. I think I can do it: operating a news agency after digital TV," Mr Paiboon said with a smile.

About the author

columnist
Writer: Krissana Parnsoonthorn
Position: Reporter