Pongsaap to battle the pirates
Pongsaap Plc, operator of the Mangpong VCD and DVD retail chain, yesterday announced a major reshuffle in its business model in a bid to fight piracy.
The move includes the termination of a contract on the use of the copyrighted works of Sahamongkol Film International Plc. The firm hopes to move to a royalty-based system instead of an annual lump-sum payment, thus saving a large amount on licence payments each year. Khiesthieyarchai Threeake-vichiti, president and CEO of Pongsaap - formerly Mangpong Plc - said the absence of a minister able to take decisions during the political crisis had led to the serious violation of intellectual property rights, denting the company's finances. Pongsaap recorded losses of Bt91.82 million in the first quarter compared to Bt4.34 million in net profit last year. "Hit by pirated VCDs, 'Nong Teng Nak Leng Phu Khao Tong' is a clear example of a VCD movie that witnessed a huge decline in presale orders, from one million units to only 140,000 units, three months before the product launch," said Khiesthieyarchai. She said this month's termination of the contract with Sahamongkol would help Pongsaap to save about Bt400 million a year on the cost of movie licences. It will instead aim for a royalty system to replace the previous lump-sum payment. "Previously, to make VCDs, we paid between Bt12 million and Bt15 million each on Thai films and, to break even, we had to sell about 250,000 to 300,000 copies," said Khiesthieyarchai. "With the serious violation of intellectual property rights in the market today, we cannot strive to achieve sales volume to break even," she said, adding that the company's wholesale business of selling VCD and DVD products to independent retailers had dropped by 50 to 60 per cent this year. "In our opinion, the movie licences charged for making VCD and DVD products should be cheaper, by about 30 per cent and 50 per cent, to allow companies to carry on their business, especially when pirated products are available in plenty," she said. Khiesthieyarchai said the firm would convert 50 standard Mangpong stores in locations such as Skytrain stations, Big C stores and community areas - as well as almost 200 kiosks and retail corners - into 'Grande' outlets, which would then do battle with pirates by selling VCDs for Bt19-Bt49. The company has this year also reduced the retail price of its VCDs at conventional Mangpong outlets by 50 to 60 per cent.
Kwanchai Rungfapaisarn The Nation
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