GMM Grammy and RS outline strategies for uncertain year

Two leading entertainment firms - GMM Grammy and RS - disclosed business strategies yesterday for generating income in an uncertain political and economical environment they fear could leave the entertainment business at risk.

Twenty-five-year old GMM Grammy plans to use a massive library of musical assets consisting of more than 20,000 songs, as well as more than 300 artists on its books.

It will generate revenue from these assets on top of conventional businesses like sales of CDs and VCDs, plus show-business events.

CEO Boosaba Daorueng said GMM Grammy's "massive assets" could serve a growing demand from corporate clients for music-based customer-relations marketing, in which exclusive privileges were offered to customers.

She said music was being used increasingly for customer-relations marketing, because people still consumed music even when they paid less for physical products. And digital technology allowed them to listen to music via new channels, from mobile phones to the Internet.

"At Grammy, we have a team of experts planning integrated marketing communications and organising activities with our business clients using Grammy's artists and music assets," Boosaba said.

At present, the company is working with what it calls a "subsidised marketing model". In a new twist on customer-relations marketing, Grammy's clients, mostly corporate, pay a fee to allow their customers to listen to Grammy's music on a free and exclusive basis.

The company is hoping its subsidised marketing business will grow 20 per cent this year from revenue of Bt500 million last year. Financial institutions and insurance companies are among those making increasing use of music in their customer-relations marketing, Boosaba said. For its part, RS sees many new business opportunities in Thailand's booming digital-media industries, including the Internet and mobile phones.

The company is planning to establish new digital communities like Artist Wap Portal and Mobitube, which will allow individual customers to access RS's artists, music and other entertainment attractions.

"We've found that teenagers, who are our key target customers, spend much of their time in front of a computer terminal rather than on conventional media like television. Most of them are involved with online communities as an important part of their daily life," said RS Digital senior executive vice president Yanyong Akrajindanon.

Internet users in Thailand increased from 11.4 million in 2006 to 13.4 million last year, and the number is expected to exceed 15 million this year. As well, the value of the online-game market in Thailand grew from Bt2.5 billion in 2006 to Bt2.7 billion last year and is forecast to reach Bt3.2 billion this year.

Yanyong said digital content, both online and mobile, currently contributed about 20 per cent of RS's revenue. However, they generate a lot of profit because of their lack of preproduction costs.

He said there were many new mobile-phone users in the market and that they had created a high demand for mobile downloads. In the first quarter, the company's revenue from downloads of digital entertainment on mobile phones grew 30 per cent year on year.

About 39 per cent of revenue earned from mobile-phone downloads was from Truetone, while 26 per cent was from full song downloads and 13 per cent from full music videos.

"We expect our revenue from online business to increase rapidly, from between Bt20 million and Bt30 million last year to between Bt90 million and Bt100 million this year, and for the mobile business from Bt250 million to between Bt275 million and Bt280 million," Yanyong said.

He said the company's website for teenagers, zheza.com, which now had more than 900,000 members, would be the company's flagship in moving its online business.

RS will also upgrade the features of its online game "Zheza Fighter", and this will be launched next month. There are now more than 20,000 registered players in the online game each day, he said.