After satellite channel merger, Media Studio looks to deals with operators
Media Studio hopes to ink a deal to produce programmes for two digital terrestrial TV channels after merging its own two satellite channels into one to cope with lower advertising revenue in the satellite TV business.
"My company is in discussions with two potential clients in the digital-television business. We will produce news, variety and drama programmes for them. The details of the projects have not been finalised yet. But we hope the deals will be confirmed and sealed before the end of the year," Supapan Wisaruetapa, managing director of Media Studio, said yesterday.
The company already produces programmes for Channel 7.
Supapan would not reveal the names of the new potential clients, but she expects that this new business unit, if realised, will account for at least 10 per cent of next year's total income.
However, she added that her company was facing the same challenges as other content providers that operate their own satellite TV stations after the arrival of 24 commercial digital terrestrial TV channels.
Advertising spending is moving from satellite TV to terrestrial-based digital channels, she explained. Previously the No 2 choice for leading advertisers after analog free TV, satellite TV stations are becoming the third priority.
This tendency is also seen by the Media Agency Association of Thailand (MAAT). It has projected that digital-TV broadcasters this year will rake in about Bt4.9 billion in advertising spending, while key cable- and satellite-TV operators will have brought in about Bt8.1 billion in total by end of 2014.
In addition, the MAAT suggested that overall advertising spending via cable and satellite TV would be slashed from last year's level of Bt13.21 billion, with a significant part of the shortfall being allocated to digital-TV channels.
In preparation for this challenge, Media Studio has decided to abandon its strategy of running two satellite channels, one for news and one for entertainment. It will drop Media News and use its Media Channel for both entertainment and news programming.
"After combining the strength of our news and entertainment programmes into a re-launched Media Channel next month, the company targets 10-per-cent [annual] revenue growth. And we want to be in the top three in the satellite-TV category to lure spending from big advertisers," Supapan said.
Last year, Media Studio's two satellite-TV stations generated about Bt160 million.
Media Studio, which is wholly owned by Stronghold Assets, also produces six TV programmes for Channel 7, which is operated and owned by Bangkok Broadcasting and Television. BBTV is the parent company of Strong Stronghold Assets.
From its production of news, drama and variety shows for Channel 7, Media Studio earned more than Bt800 million last year and expected to see 10 per cent increase from this business segment.
Media Studio has earmarked Bt100 million for new equipment for producing high-definition programmes.