Traction Media Co Ltd will be set up in October with a registered capital of Bt10 million, and will offer a range of services, such as games and events, and sampling and promotion of principal products at Tsutaya stores.

Tsutaya currently provides these services to about 10 product brands through its internal below-the-line and media division. This is now to become a separate, profit-making entity, whose official launch is scheduled for November.

"We have a strong network of 271 outlets throughout the country - 90 per cent of which are franchised - and a total membership of more than 2.4 million households," said Tsutaya chief executive Wanchai Phlaphongphanich.

"Our stores are not just conventional video rental shops, but rather they are lifestyle entertainment clubs where customers can come for exciting experiences and fun," he said.

Under the new service, business clients with many products, such as food and snacks, beverages, batteries and mobile

telephones, will be able to create below-

the-line activities by using Tsutaya's strong network of stores and its large customer base.

They will be able to use the outlets as distribution centres, for sampling and promotional activities, or join with the firm's loyalty point-plus campaign to track customers and their shopping habits.

"There are currently about 10 brands using our below-the-line and media services, including Nokia, Herbal Life, Mentos, Lay's and Samsung. Their campaigns range from three months to more than a year," Wanchai said.

"Below-the-line and media services currently contribute about 5 per cent of total revenue. We expect the new business to achieve revenues equal to Tsutaya's income from its conventional video rental services within two years," Wanchai said.

He said the new service would provide better traffic to stores, as well as extra revenue and benefits to its franchisees and customers.

Tsutaya (Thailand) also joined yesterday with seven major music distributors to launch its new music rental service. Its collaborators, RS, APS Inter Music, Here, Platinum, UPL Group, Indy Cafe, and No More Belts, distribute music from more than 40 record companies.

Wanchai said more than 100 of its 271 outlets will begin renting music CDs, VCDs and DVDs by the end of the year. One-day rentals will cost Bt20 for CDs and VCDs and Bt30 for DVDs.

"We will focus over the next couple of years on making our music rental and below-the-line and media services successful. That will help our stores to become lifestyle entertainment and culture centres similar to those already existing in Japan," he said.

Kwanchai Rungfapaisarn

The Nation