Billionaires play big in digital TV game

Billionaires play big in digital TV game

Thailand's wealthiest are buying into operators struggling to keep afloat

Among all the media outlets, newspapers, radio and TV suffered the biggest decline in ad spending in the first half of the year, and the bleak prospects are forecast to persist for this year.
Among all the media outlets, newspapers, radio and TV suffered the biggest decline in ad spending in the first half of the year, and the bleak prospects are forecast to persist for this year.

The media business and billionaires seem to attract each other.

At the global level, some billionaires like Rupert Murdoch and Michael Bloomberg are long-time media moguls who made their fortunes in the news business. Others, like Amazon founder Jeff Bezos, bought publications as a side investment after building a substantial fortune in another industry.

According to Forbes, billionaires own part or all of several of America's influential national newspapers, including Washington Post, The Wall Street Journal and The New York Times, in addition to magazines, local papers, and online publications.

Several other billionaires, including Comcast chief executive Brian Roberts and Liberty Media chairman John Malone, own or control cable TV networks that are powerful but not primarily news-focused.

Hence, it comes as no surprise Thailand has followed the same model. The Chearavanont family owns TrueVisions, the country's leading pay-TV operator, and TNN 24 news station. The Ratanarak family controls Bangkok Broadcasting's Channel 7.

The Chearavanont brothers, led by Dhanin, honorary chairman of Charoen Pokphand Group, Thailand's agriculture and food conglomerate, is the wealthiest family in Thailand this year, according to Forbes magazine.

When the National Broadcasting and Telecommunications Commission granted 24 digital TV channel licences to 17 winning bidders in April 2014, aviation tycoon Prasert Prasarttong-Osoth, a major shareholder of Bangkok Airways and Bangkok Dusit Medical Services Plc, joined the media scrum, as his company, Bangkok Media and Broadcasting Co, the operator of PPTV channel, won a licence.

Intense competition caused many digital TV operators to struggle financially in terms of both revenue and financial support after only three years of operations. Enter the billionaire Sirivadhanabhakdi family, the owner of Thai Beverage Plc and Thailand's second-wealthiest clan according to Forbes magazine, to the digital TV business.

Last year, patriarch Charoen Sirivadhanabhakdi's two sons, Thapana and Panote, acquired a 47.6% stake of Amarin Printing and Publishing Plc, while the Prasarttong-Osoth family acquired 50% of One Enterprise Co, a digital TV subsidiary of SET-listed GMM Grammy.

The Sirivadhanabhakdi family via Adelfos Co, the family's investment firm, made another deal last month in the digital TV business, acquiring a 50% stake in GMM Channel Trading Co, the operator of GMM25, the standard-definition digital TV channel owned by GMM Grammy Plc.

Media analysts predict going forward, more financially weak operators may turn to billionaire investors to help them survive.

The analysts say the market entry by billionaires into the media and digital TV business is mainly to serve their existing businesses and for risk diversification.

Mana Treelayapewat, dean of the School of Communication Arts at the University of the Thai Chamber of Commerce, agreed financially weak operators are bringing in new shareholders mainly to stay in business. He is confident that next year more weaker digital TV operators will find strategic partners to shore up their operations.

"Many digital TV companies are figuring out that to handle operating losses they need to find new strategic partners or investors to carry them during the era of digital TV war," he said.

Wannee Ruttanaphon, chief executive of IPG Mediabrands Thailand and vice-chairman of the Media Research Development Association, said future partnerships between weak digital TV operators and investors with deep pockets will depend on both parties' discretion.

"Last year ad spending slowed down for every media platform, especially TV, as advertisers and brands mostly shifted their media spending to online because of its higher potential in reaching the right target," she said.

"This year digital TV channels seem to be performing better, especially companies who have strong positioning and a fan base that can draw advertisers and brands to spend on their channels. But the weak ones still face the same problems."

The Media Agency Association of Thailand (MAAT) forecasts that total ad revenue in all media outlets will fall 11% this year from 121 billion baht in 2016, as every sector has baulked at spending on all media channels because of the ongoing economic fluctuation and unpredictable national situation.

Advertising spending figures for all media outlets contracted 5% in the first half of this year to 60.3 billion baht.

Among all media outlets, newspapers, radio and TV suffered a massive decline in the first half of this year, with the bleak prospects expected for the entire year.

Ad spending on radio, newspapers and magazines fell 18%, 19% and 36% to 2.48 billion baht, 5.81 billion and 1.07 billion, respectively. Ad spending on TV media including digital TV, cable TV and satellite TV fell 10% for the period to 35 billion baht.

Ad spending on the internet, transit media, cinema and out-of-home media soared 24%, 27%, 25% and 16% to 5.89 billion baht, 3.09 billion, 3.4 billion and 3.04 billion, respectively, during the first half of the year.

Triluj Navamarat, chairman of the MAAT, said these figures illustrate that advertisers and media agencies are likely to use platforms that influence the most consumers, including in-store media as well as transit, out-of-home media, cinema and online media that consumers interact with in their everyday life.

He said online advertising will continue to sharply rise because its ad expenses are lower than traditional media and it can target niche groups.

Do you like the content of this article?

Prison sealed off after more Covid cases found

NAKHON SI THAMMARAT: The Correctional Institute for Young Offenders in Muang district of this southern province has been sealed off after 130 more Covid-19 infections were found among detainees, provincial governor Kraisorn Wisitwong said on Sunday.


Myanmar military convoy hit by roadside bomb near Yangon: junta

Myanmar anti-junta dissidents have carried out a bomb attack on security forces near Yangon, with several killed in an ensuing firefight, the military and media said.


Indonesian militant leader killed in shootout, police say

JAKARTA: Indonesian security forces have killed the leader of militant group East Indonesia Mujahideen (MIT), which has ties with Islamic State, police said on Sunday.