CEO Surachai Chetchotisak said that downsizing the factory was part of the company's strategy to overhaul its operations from a conventional music firm into an entertainment content provider and media company that relies on digital media and the Internet. The company for years has relied on physical media such as tape cassettes, CDs and VCDs as well as running retail outlets.

The company also announced a new joint venture, RS I-Dream Co Ltd, which will import shows to Thailand.

The Pathum Thani factory will still produce CDs and VCDs, sales of which have declined from last year. RS Plc claims to be among the media pioneers in Thailand, distributing its music and other entertainment products through new technology such as online downloads to computers, mobile phones and MP3 players.

"We have been downsizing our factory since the beginning of this year by cutting the production line for tape cassettes. It is not worth it to cover costs and expenditures on employees and a high rate of product returns from retail shelves which causes a huge stock burden," said Surachai, adding that RS would like to create a new digital channel for its music and other entertainment content.

He gave the example of the company's cyber artist DDZ which could create revenues of more than Bt40 million without the launch of a single physical album. Most of the DDZ's sales were generated via digital channels such as online downloads of their music.

He said that the company was only able to sell about 20 to 30 per cent of all the tape cassettes its makes and that retailers return the rest, resulting in piles of useless inventory.

"We have reorganised over the past two years and no longer rely on conventional ways of doing business. We have treated both our artists and music products as entertainment content that can be delivered to individual customers through diversified distribution channels such as CDs, VCDs, or even new media technologies such as Ipods and MP3 players," said Surachai.

The benefit of delivering music content digitally is that it does not rely on physical burdens such as raw materials and stock, he said.

He added that the company's customers could select individual songs on the company's website, rather than being forced to shop for the whole album as with CDs and VCDs.

Kwanchai Rungfapaisarn

The Nation