Do or die time for digital TV operators
In the cut-throat environment through which these players trek, only 10 are expected to survive the coming years.
After three years of digital TV operations, a clear-cut picture is emerging of those who will rise and those who will fall by the wayside.
Industry experts agree that over the next several years, only 10 digital TV operators, based on TV viewership ratings and advertising revenue, will survive, leaving the rest struggling to stay afloat, slowly drowning from poor quality content.
According to a recent study by Nielsen Thailand, the nationwide top 10 digital TV channels in June were Bangkok Broadcasting and Television Co's (BBTV) Channel 7; BEC World's Channel 3 HD; Workpoint TV; Channel 8 by RS Plc; Mono 29; GMM Grammy's ONE HD; Amarin TV HD; Thairath TV; Channel 3 SD; and satellite TV channel Boomerang.
BEC World Plc group chief executive Prachum Maleenont, is even less optimistic, predicting only five to eight digital TV channels will survive the intense competition of the business over the next three years.
He said the smart positioning of each channel is on par with content quality, as it will attract not only audiences but also increase TV viewership ratings.
"Digital TV channels should focus not only on raising advertising revenue, but also integrating their content to be broadcast through social media and online channels to support the digital TV business," said Mr Prachum.
Mana Treelayapewat, dean at the School of Communication Arts at the University of the Thai Chamber of Commerce, said the competition in the digital TV business will become more intense in the second half of the year. He reiterated that channels with interesting content and clear positioning will be in the best position to stay afloat.
Mr Mana said that only the top 10 digital TV operators will be able to survive in the next three to four years given their strong financial lifelines, allowing them not only to continue investment but also to absorb losses until they reach a break-even point, which could take up to seven years.
Adisak Limparungpatanakij, former president of the Nation Broadcasting Corporation, said on his personal Facebook page that the bulk of digital TV operators are likely to see more losses in the coming years.
He has categorised the digital TV channels into three groups: news channels, standard definition (SD) variety channels and high-definition (HD) variety channels.
The first group, which includes TNN, Springnews, VoiceTV, NationTV, BrightTV and NewTV, reported their accumulated revenue for three years at 4.3 billion baht and a combined net loss of 3.86 billion.
Each channel has averaged 300 million baht a year, while net losses exceeded 1 billion.
Mr Adisak said these channels must increase their revenue by 45-50% to maintain their businesses and earn revenue of more than 450 million baht annually to stay in the game.
The group of SD variety channels, which includes WorkPointTV, Now26, Mono29, True4U, Channel 8 and GMM25, meanwhile, has more promising prospects, as every channel except Now26 reported higher revenue last year.
In three years, this group has reported accumulated revenue of 12.4 billion baht and a net loss of 4.8 billion baht.
Each channel has earned, on average, 690 million baht in revenue and a net loss of more than 800 million a year.
WorkPointTV, nonetheless, has stood out prominently within this group, with a net profit of 106 million baht in 2016, while the other players remained stuck in the net loss trap.
Mr Adisak said the SD variety channels must increase their revenue by 260-270 million baht a year to make a profit.
For the HD variety channels comprising MCOT, ONE3, Thairath TV, Channel3, Amarin TV, Channel 7 and PPTV, this group performed the worst money-wise, with combined revenue of 23.4 billion baht and combined losses of 3 billion baht, said Mr Adisak.
But he had no further comment on this group, saying their financial status is mostly strong.
Today, Workpoint TV, operated by SET-listed Workpoint Entertainment Plc, is considered to be one of the most successful digital TV operators, with its viewership ratings in June overtaking Channel 3 and Channel 7 during the prime-time period in Bangkok. The company pins its success on its content creativity and quality in the highly competitive market.
The victory over the two big channels in Bangkok showed that a new digital TV player who has never joined the TV industry can become a leader amid heavy competition, the operator said.
But Channel 7 remains the leader on a nationwide basis, while Channel 3, as usual, retains its top ranking in Bangkok.
Workpoint TV's chief operating officer Chalakorn Panyashom said even though the TV industry is very competitive and many digital TV operators are trying to increase their audience bases, Workpoint TV said it is committed to producing high-quality content to further attract audiences, citing programmes such as The Mask Singer Season 2.
Prior to the second season, The Mask Singer, a singing competition where contestants wear masks to conceal their identities, helped drive Workpoint TV to its ratings' peak for two three months, with the show first airing in October last year.
Pawat Ruangdejworachai, vice-president at Media Intelligence, said the digital TV industry is changing as the dominant players like Channel 7 and Channel 3 are being chipped away at by new channels that can appeal to niche markets.
"The industry has become more fragmented as audiences have greater choices when it comes to content," he said.
Mr Pawat said he was not surprised that Workpoint TV had won the top TV ratings during prime time in Bangkok as the channel has adapted itself well to broadcasting quality content through many platforms.
He said digital TV operators should adapt themselves by broadcasting content that attracts both viewers and advertisers.
According to Nielsen Thailand's report, total media advertising spending in Thailand continued to decline in the first half of 2017 because of the fragile economic recovery.
Ad spending fell by 7.08% year-on-year to 52.8 billion baht in the first half, compared with the same period in 2016.
Digital TV ad expenditure climbed 3.64% to 11.1 billion baht, up from 10.7 billion year-on-year.
But the advertising sector forecasts a clear recovery this year, with a 10% rise in total ad spending to 144 billion baht.