Advert ok boosts Satellite TV

The satellite TV sector has been bustling with movement since the government announced that on May 22 it would allow cable and satellite-based TV outlets to run commercials for six minutes per hour, half that allowed on free-TV channels.

Three new operators have jumped into the satellite TV business: television content provider Media Touche (Thailand) (a subsidiary of mTouche, a Malaysian content provider for mobile phones); Media of Medias, a major local TV programme producer; and CVD Entertainment, under the umbrella of free-TV Channel 3 operator BEC World.

Media Touche made a soft launch for its free-to-air cable-TV channel My TV on April 1.

The channel required a Bt70-million investment, including production and broadcasting equipment and marketing budget.

Content on the channel will be similar to that of free-TV channels, which feature a range of programming: international series such as "CSI: Crime Scene Investigation", game shows, documentaries, entertainment shows and local and international music programmes.

Viewers have to buy a C-Band satellite dish or register to apply for membership with any of the 500 registered provincial cable-TV operators. The channel is the eighth in the MVTV network.

Media Touche expects to establish two more stations, featuring interactive and movie content. The first is expected to start up next year.

Meanwhile, Media of Medias, a subsidiary of the Channel 7 free-TV station, announced last week that it would invest Bt100 million to establish three free-to-air channels, consisting of news, lifestyle and movie-soap opera channels. The channels should start airing in the final quarter of the year.

CVD also plans to invest Bt100 million in a station that will feature entertainment content.

The Broadcasting Act, which allows satellite TV stations to generate revenue from ad airtime in addition to membership fees, has significantly stimulated the satellite TV business. It represents a huge business opportunity.

First, advertisers can ensure they reach exact target groups because satellite stations usually broadcast only one type of programme, such as movies, music, cooking or documentaries.

Channels could attract niche target groups for luxury houses, cars, watches and premium cosmetic brands. Some might move to satellite channels from free-TV channels, said TBWA\Thailand managing director Chaipranin Visudhipol.

Media Touche, for example, has already acquired five big advertisers, including Warner Music and Grammy, as corporate customers.

Second, in the start-up period, ad spending will be very cheap compared to ad rates on free-TV channels, which would also give an opportunity for small and medium-sized entrepreneurs to build awareness of their products, particularly via local satellite stations that target upcountry audiences.

However, over the last two years, satellite TV stations have attracted only a tiny audience.

"Satellite TV at first was very new and satellite dishes were very expensive from Bt20,000 to Bt50,000 per dish," said Media Touches country manager Charndet Phrommanee.

He said people installed satellite dishes to watch international TV programmes and movies. But as audiences are increasing, local operators are starting to establish channels to advertise consumer products to reach specific customer groups.

There are currently about 60 satellite TV stations, with a total of 500,000 members. The reason for the rising number is cheaper prices at Bt3,000 per dish. In addition to providing international TV programmes, they also receive clear signals from the six local free-TV channels.

The business has shown good growth at 20 per cent annually.

The disappearance of TITV in late January is another factor driving growth, as people and advertisers have had to switch to other channels.

Current advertising spending via satellite TV stations is worth Bt3 billion out of a total Bt50-billion spending on all TV channels, said Charndet. He foresees spending increasing to Bt5 billion over the next three years.

Ad agencies have also started paying greater attention to the satellite channels, although they will not as yet create a big impact on overall ad industry spending.

Although the satellite TV business presents a great business opportunity, Y&R advertising agency CEO Sorn Chongsricharn cautions that operators should not forget their objectives in establishing the channels.

"They will receive revenue from two ways: member fees and advertising airtime," he said. "But audiences who pay for their membership might not expect to see as many advertisements as on free-TV channels. They should be very careful in setting the time for commercials."